Price-Setting Behaviour of Norwegian Firms – Results of a Survey
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In 2007, Norges Bank conducted a survey of price-setting behaviour among a random sample of Norwegian firms. The background to the survey is that modern monetary policy theory makes a number of assumptions about how the individual firm sets its prices. At the same time, aggregate price movements are a result of all participants’ pricing decisions. An insight into what determines prices at the individual firm is therefore very useful for a central bank. Some key results from the survey are that there is typically some interval between price adjustments, and that firms try to look ahead when setting prices. There is also little support among Norwegian firms for the most traditional explanations of why prices remain unchanged over time.