This paper uses a unique micro data set to test for the presence of price asymmetries at the firm level. We find that firm pricing is indeed asymmetric, as Tobin (1972) suggested. Moreover, there is strong evidence to support Ball and Mankiw's (1994) suggestion that firm price asymmetry is dependent on inflation.
Asymmetric pricing, Inflation, Menu-Costs, Ordered Probit, Survey Data
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