@article {16251,
	title = {Frequency of Price Adjustment and Pass-through},
	journal = {Quarterly Journal of Economics},
	volume = {125},
	number = {2},
	year = {2010},
	pages = {675-727},
	abstract = {We empirically document using U.S. import prices that on average goods with a high frequency of price adjustment have a long-run pass-through that is at least twice as high as that of low-frequency adjusters. We show theoretically that this relationship should follow because variable mark-ups that reduce long-run pass-through also reduce the curvature of the profit function when expressed as a function of the cost shocks, making the firm less willing to adjust its price. Lastly, we quantitatively evaluate a dynamic menu-cost model and show that the variable mark-up channel can generate significant variation in frequency, equivalent to 37\% of the observed variation in the data. On the other hand the standard workhorse model with constant elasticity of demand and Calvo or state dependent pricing has difficulty matching the facts.},
	url = {http://dx.doi.org/10.1162/qjec.2010.125.2.675},
	author = {Gita Gopinath and Oleg Itskhoki}
}
