Asymmetricpriceadjustmentinthesmall$

Analysesofalargeretailscannerpricedatasetrevealanewandsurprisingregularity– smallpriceincreasesoccurmorefrequentlythansmallpricedecreasesforpricechanges of upto10b. Thatis,wefindasymmetricpriceadjustment‘‘inthesmall.’’Furthermore,it turnsoutthatinflationoffersonlyapartialexplanationforthefinding.Indeed,substantial proportion oftheasymmetryremainsunexplained,evenafteraccountingfortheinflation. For example,theasymmetryholdsalsoafterexcludingperiodsofinflationfromthedata, and evenforproductswhosepricehadnotincreased.Thefindingsholdfordifferent aggregate anddisaggregatemeasuresofinflationandalsoafterallowingforlaggedprice adjustments.