Price changes in Sweden – insights from five million observations

Their study shows that when companies change their prices, they make roughly the same size adjustments every time over time. On average, the size of price changes has been fairly stable. The extent to which prices are lowered or raised from month to month does not therefore seem to be the decisive factor behind movements in aggregate inflation in the longer term. However, the study shows that there is a strong correlation between the rate of inflation and the frequency with which prices change. The same tendency - that it is the frequency, not the size of price changes that matters the most with regard to inflation - is also found in studies carried out on, for example, US data.