Stuck at zero: Price rigidity in a runaway inflation

Avichai Snir, Haipeng (Allan) Chen, Daniel Levy

Research output: Contribution to journalArticlepeer-review

1 Scopus citations


We use micro level retail price data from convenience stores to study the link between 0-ending price points and price rigidity during a period of a runaway inflation, when the annual inflation rate was in the range of 60%–430%. Surprisingly, we find that more round prices are less likely to adjust, and when they do adjust, the average adjustments are larger. These findings suggest that price adjustment barriers associated with round prices are strong enough to cause a systematic delay in price adjustments even in a period of a runaway inflation, when 85 percent of the prices change every month.

Original languageEnglish
Article number109885
JournalEconomics Letters
StatePublished - Jul 2021

Bibliographical note

Publisher Copyright:
© 2021 Elsevier B.V.


  • 0-ending price points
  • 9-ending price points
  • Cost of price adjustment
  • Menu cost
  • Runaway inflation
  • Sticky prices/rigid prices


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