Retailers are now shifting prices every 3.6 months, Harvard Business School research shows.

While e-commerce is driving retailers to change prices more frequently, it is also leading to more uniform pricing across online and offline retailers.

A paper by Alberto Cavallo of Harvard University found evidence that the algorithms used by internet-based retail giants like Amazon to constantly change and adjust prices have led to greater price fluctuations in response to various macroeconomic shocks. This so-called ‘Amazon Effect’ not only forces brick-and-mortar outlets to respond in a similar manner but also
-> Continue reading DNA India – “The Amazon effects and monopsony”

The influence of a growing online retail industry increases consumers’ exposure to the fluctuations of energy prices and exchange rates.

According to Harvard Business School professor Alberto Cavallo, e-commerce is flatlining competition.

Prices for groceries sold by Walmart vary less from one store to another when Amazon markets the same references.

Amazon Effect: researcher claims web giant’s low prices keep inflation in check

Retailers adjusting prices more frequently and uniformly across locations should react faster to economic shocks, shows a recent study

Competition between Amazon and traditional retailers is causing prices to become more uniform

MIT Sloan professor Roberto Rigobon and Harvard University professor Alberto Cavallo are the co-founders of the Billion Prices Project. The project collects prices — it has around 15 million prices today — provided by online retailers around the world. The public data is used to conduct research in macroeconomics and international economics. The professors say
-> Continue reading MIT Management Sloan School – “Measuring the Facts: Using Data to Tell the True Story of Inflation”

A new study argues that the growth of Amazon and other online retailers has kept inflation and prices low in the U.S. Will Israel and other Middle Eastern economies follow suit and allow e-commerce to take off?

Online competition increases the frequency and uniformity of price changes at brick-and-mortar retailers.  

Alberto Cavallo, who works as an associate professor in the Harvard said that in the last 10 years, the competition in the online retailing has increased the price change frequency along with the uniform pricing degree across all the location.

Last week, the Federal Reserve Bank of Kansas City held its much anticipated annual central banking conference in Jackson Hole. This year’s topic “Changing Market Structures and Implications for Monetary Policy” garnered even more attention than usual.

Harvard Business School found that the average duration for regular price changes fell to 3.65 months in 2014 to 2017 from 6.7 months in 2008 to 2010. It also investigated how prices at Amazon, Walmart, Best Buy and Safeway vary across geographic locations. Harvard’s Alberto Cavallo concludes that the paper’s most important finding is that
-> Continue reading CNBC – “Under ‘Amazon effect’ retailers could be more exposed to supply shocks”

A discussion of competition and “superstar” firms at an exclusive economic policy conference in Jackson Hole, Wyoming, threw up a spirited defense of global trade, while central bankers were also warned of the low level of trust they have among the public.

When thinking about the “Amazon Effect,” one may think invariably about retail, and the impact the eCommerce giant has on the sector — changing the very nature of how everything from books to clothes are bought and brought to end customers.

Harvard University professor Alberto Cavallo presents a paper at Kansas City Fed’s annual economic symposium

The increase in popularity and decrease in prices from Amazon may be to blame for the rise in inflation over the last few years, reports Reuters.

Retailers’ prices have grown more uniform across locations, finds a paper presented at Jackson Hole

It is an area rich in data waiting to be mined–and the results could bring more clarity to India’s perennial inflation debates.

Desbordado por las alzas, salidas de quicio, el gobierno de Maduro abandonó informes sobre precious.

For nine years, from 2007 to 2015, the Argentine government manipulated economic statistics in an attempt to fool the public into believing inflation was lower than it actually was. Citizens, however, didn’t buy it. In fact, they showed a remarkable aptitude for seeing through the claims.

Organisations like the Bank and the Office for National Statistics can now draw on exponentially more data to produce their assessments of how the country is performing.

The goal of mapping economic activity in real time, just as we do for weather or traffic, is “closer than ever to being within our grasp”, according to Andy Haldane, the Bank of England’s chief economist.

PriceStats, based on MIT’s Billion Prices Project, takes a daily temperature using online sales.

Mining digital information for accurate, up-to-date economic snapshots could help officials make quicker and better decisions

Through a vast and ongoing data-collecting exercise, PriceStats has helped central banks overcome many of the drawbacks inherent in traditional inflation series.

The growth of e-commerce is well understood, tracking the smartphone’s ubiquity and a global supply chain that delivers consumer goods quickly and cheaply. Its impact on inflation—the so-called Amazon effect—is still being explored by economists.

In public debates about economic policy, it can be hard to separate real insights from political posturing. But a few simple rules of thumb can help.

The recent financial crisis, and the euro area sovereign debt crisis that followed, were characterised by periods of increased heterogeneity, market fragmentation and sudden turns in economic activity. This often made it difficult for economic policymakers to understand and assess in real time the underlying forces driving economic behaviour. Both traditional statistical datasets and our
-> Continue reading ECB Press – “Policy analysis with big data”

Alberto Cavallo ajudou a elaborar uma pesquisa de preços on-line e criou portal que mede as variações na Argentina e Venezuela .

La inflación venezolana es de tal magnitud que da para experimentos. En el Instituto Tecnológico de Massachussets, en Estados Unidos, comenzaron uno hace tres meses: medir la inflación, esa que descose los bolsillos de los ciudadanos, con ayuda de los mismos que la padecen.

The purchasing power of one dollar is worth more online, according to software company Adobe’s Digital Price Index, which looked at online and offline spending. If consumers had shifted all of their offline spending last year to online, that difference would have meant saving about $2.2 billion, it estimated.

New price data from Adobe Systems Inc., released today, show that online increased its price advantage vs. offline over the past two years. Logically speaking, though, the gap can’t keep widening forever. And there are some hints in the data that online’s edge is already—well, not going away, but approaching its limit.

Big Data se define como la masividad de datos producidos por interacciones electrónicas a través de teléfonos celulares, transacciones online o redes sociales. Lleva el nombre de “big” por la enorme cantidad de datos que se generan a partir de las interacciones electrónicas entre personas.

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Economists, policymakers, and business leaders need better data on which to base their forecasts. Fortunately, new sources of information about the economy have recently emerged: the vast collections of private data collected by search engines and other Internet companies.