Study reveals why prices stay high, impacting consumer wallets worldwide.
This paper looks at why prices don't change quickly in German retail stores. The researchers used data from surveys done by businesses from 1991 to 2006. They found that changes in the economy and company-specific factors affect when prices are adjusted. Price expectations also play a role in when prices are updated. The cost of materials used in making products is a big factor in price changes. It takes time for prices to adjust to changes in material costs, making prices stickier at the end of the production process.