Why Do Prices in Sierra Leone Change So Often? A Case Study Using Micro-level Price Data

Author/Editor:

Arto Kovanen

Publication Date:

February 1, 2006

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

We use cross-section and time-series techniques to analyze pricing behavior in Sierra Leone. In cross-sectional data, we find that inflation volatility and product diversification are the main factors explaining differences in the frequency of price adjustments. We show that variance in the fraction of prices subject to change is a key determinant of inflation volatility in Sierra Leone, indicating that retail prices are sensitive to economic events. We explain variations in this fraction over time with past inflation and monetary growth, which are important policy variables.

Series:

Working Paper No. 06/53

Subject:

English

Publication Date:

February 1, 2006

ISBN/ISSN:

9781451863130/1018-5941

Stock No:

WPIEA2006053

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

29

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