Abstract
Summary In this paper we investigate the relationship between price dispersion and inflation; we use weekly retail scanner data from 2009 to 2011 to measure price dispersion and inflation for several dairy products. We implement a linear model to investigate the linkage between price dispersion and consumer price indexes. As in the previous literature, we obtain mixed results with respect to the relationship between price dispersion and inflation, and further investigation and theoretical refinement are needed to identify a common pattern.
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