Template-Type: ReDIF-Paper 1.0
Author-Name: Erwan Gautier
Author-X-Name-First: Erwan
Author-X-Name-Last: Gautier
Author-Workplace-Name: Banque de France; Universite Paris-Dauphine
Author-Name: Cristina Conflitti
Author-X-Name-First: Cristina
Author-X-Name-Last: Conflitti
Author-Workplace-Name: Banca d'Italia
Author-Name: Daniel Enderle
Author-X-Name-First: Daniel
Author-X-Name-Last: Enderle
Author-Workplace-Name: Oesterreichische Nationalbank
Author-Name: Ludmila Fadejeva
Author-X-Name-First: Ludmila 
Author-X-Name-Last: Fadejeva
Author-Workplace-Name: Latvijas Banka
Author-Name: Alex Grimaud
Author-X-Name-First: Alex
Author-X-Name-Last: Grimaud
Author-Workplace-Name: Oesterreichische Nationalbank; TU Wien
Author-Name: Eduardo Gutierrez
Author-X-Name-First: Eduardo
Author-X-Name-Last: Gutierrez
Author-Workplace-Name: Banco de Espana
Author-Name: Valentin Jouvanceau
Author-X-Name-First: Valentin
Author-X-Name-Last: Jouvanceau
Author-Workplace-Name: ECB; Lietuvos Bankas
Author-Name: Jan-Oliver Menz
Author-X-Name-First: Jan-Oliver
Author-X-Name-Last: Menz
Author-Workplace-Name: Deutsche Bundesbank
Author-Name: Alari Paulus
Author-X-Name-First: Alari
Author-X-Name-Last: Paulus
Author-Workplace-Name: Eesti Pank
Author-Name: Pavlos Petroulas
Author-X-Name-First: Pavlos
Author-X-Name-Last: Petroulas
Author-Workplace-Name: Bank of Greece
Author-Name: Pau Roldan-Blanco
Author-X-Name-First: Pau
Author-X-Name-Last: Roldan-Blanco
Author-Workplace-Name: Universitat Autonoma de Barcelona; Barcelona School of Economics
Author-Name: Elisabeth Wieland
Author-X-Name-First: Elisabeth
Author-X-Name-Last: Wieland
Author-Workplace-Name: ECB; Deutsche Bundesbank
Title: Consumer Price Stickiness in the Euro Area During an Inflation Surge
Abstract: We use CPI micro data for nine euro area countries to document new evidence on consumer price stickiness in the euro area during the 2021-2024 inflation cycle. In 2022, the monthly frequency of price changes reached 12%, compared with an average of 8% over 2010-2019, roughly a fourpercentage-point increase; it then fell quickly in 2023 and more slowly in 2024, ending close to its pre-pandemic level. The decline in the frequency of price changes was faster for food and nonenergy industrial goods (NEIG) than for services, where frequencies remained elevated in 2024. The overall frequency rose mainly because there were more price increases, while the magnitude of the average size of the price increases or decreases changed only marginally during the surge. Products with a larger imported-energy cost share responded more strongly, and hazard-rate evidence shows that the probability of price adjustments increases with the gap between actual and optimal prices, consistent with state-dependent pricing and a steepening of the Phillips curve. To illustrate the implications of this state dependence, a macro model suggests that peak inflation would have been almost 1 percentage point lower if the frequency had not responded to the inflation surge.
Creation-Date: 2026-02-16
File-URL: https://datnes.latvijasbanka.lv/papers/WP_1-2026.pdf
File-Format: Application/pdf
Number: 2026/01
Classification-JEL:  E31, E52, F33, L11
Keywords: price rigidity, euro area, inflation surge, micro price data
Handle: RePEc:ltv:wpaper:202601