1/2026 Erwan Gautier et al. Consumer Price Stickiness in the Euro Area During an Inflation Surge
Working Papers of Eesti Pank
Erwan Gautier, Cristina Conflitti, Daniel Enderle, Ludmila Fadejeva, Alex Grimaud, Eduardo Gutiérrez, Valentin Jouvanceau, Jan-Oliver Menz, Alari Paulus, Pavlos Petroulas, Pau Roldan-Blanco, Elisabeth Wieland.
We use CPI micro data for nine euro area countries to document new evidence on consumer price stickiness in the euro area during the 2021-2024 inflation cycle. In 2022, the monthly frequency of price changes reached 12%, compared with an average of 8% over 2010–2019, roughly a fourpercentage-point increase; it then fell quickly in 2023 and more slowly in 2024, ending close to its pre-pandemic level. The decline in the frequency of price changes was faster for food and nonenergy industrial goods (NEIG) than for services, where frequencies remained elevated in 2024. The overall frequency rose mainly because there were more price increases, while the magnitude of the average size of the price increases or decreases changed only marginally during the surge. Products with a larger imported-energy cost share responded more strongly, and hazard-rate evidence shows that the probability of price adjustments increases with the gap between actual and optimal prices, consistent with state-dependent pricing and a steepening of the Phillips curve. To illustrate the implications of this state dependence, a macro model suggests that peak inflation
would have been almost 1 percentage point lower if the frequency had not responded to the inflation surge.
JEL Classification: E31, E52, F33, L11
Keywords: Price rigidity, euro area, inflation surge, micro price data.
DOI: 10.23656/25045520/012026/0228
The views expressed are those of the authors and do not necessarily represent the official views of Eesti Pank or the Eurosystem.
