Draws on a national, multi-industry survey of company heads and other corporate price setters to test the validity of 12 prominent theories of price stickiness. Decision makers were asked whether considerations identified in each theory entered into their own decision making process. Results show that contrary to popular wisdom, prices do not increase more easily than they decrease, and that firms do not appear to practice anticipatory pricing. Annotation c. by Book News, Inc., Portland, Or.
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ALAN S. BLINDER is Gordon S. Rentschler Memorial Professor of Economics at Princeton University, where he has taught since 1971. He also founded and directs Princeton's Center for Economic Policy Studies. He has served as vice chairman of the Board of Governors of the Federal Reserve System and as a member of the president's Council of Economic Advisers. ELIE R. D. CANETTI is an economist for the International Monetary Fund. He previously worked at the World Bank and the United States Treasury. DAVID E. LEBOW is an economist at the Board of Governors of the Federal Reserve System. JEREMY B. RUDD is senior economist at the Council of Economic Advisers, Washington, D.C.
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