Working Paper
The Price-Change Statistics We’ve Weighted For
Abstract: The real effects of monetary policy depend on price stickiness. Existing studies that measure aggregate stickiness using US consumer price index microdata hold the consumption basket fixed. This yields a lower level of stickiness in 2024 compared with 1978. We show instead that stickiness is unchanged. Although individual products now change prices more frequently, the effect is largely offset by shifts in consumer spending, notably toward services with stickier prices. These consumption-basket shifts reduce the estimated decline in monetary non neutrality by 25 percentage points, suggesting that monetary policy remains far more effective than methods used in existing studies imply.
JEL Classification: E31; E52; E58;
https://doi.org/10.29412/res.wp.2026.06
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Bibliographic Information
Provider: Federal Reserve Bank of Boston
Part of Series: Working Papers
Publication Date: 2026-04-01
Number: 26-2