Abstract :
The price-settingbehaviorofmanufacturingfirmsisexaminedusingalargepanelof
quarterlyfirmsurveydatafrom1984to2007,whichallowschangesinfirms’pricesto
be linkedtoseveralfirm-specificvariables.Theresultsshowthatstate-dependent
pricingisclearlypresentinalow-inflationenvironmentandthatvariablesmeasuring
thecurrentsituationofthefirm,especiallycostsforintermediateproducts,are
importantdeterminantsofpriceadjustments.Comparedtopurelytime-dependent
features,thestate-dependentvariablessignificantlyaddtotheexplanatorypowerofa
price adjustmentprobabilitymodel.Macroeconomicfactorsaresignificantbut
contributelittleintermsofthegoodnessoffit.Furthermore,whentakingintoaccount
stickyplanmodelsbyexcludingpossiblypredeterminedpricechanges,theimportance
of state-dependentfactorsbecomesevengreater
