Furthermore, in most specifications, the unweighted average price adjustment interval for all industries is below 1 yr, and the weighted average--using industry shares of total sales as weights--price adjustment interval for all specifications ranges from no higher than 3.
Their aggregate parameter estimates imply a relatively lengthy average price adjustment interval, typically at least 6 quarters in the case of U.
To calculate an unweighted average estimated price adjustment interval for a given NAICS industry grouping or for all firms, we average the parameter estimates of [theta] for the relevant industries.
Then, we calculated the implied adjustment interval, 1/(1 - [?
This percentage drops to below 23% when the discount factor is restricted to reasonable values, and under these restrictions, industries accounting for at least 36% of all sales in the industries we analyze have estimated price adjustment intervals of less than 2 quarters.
Numerous theoretical contributions to the burgeoning sticky-price literature likewise appeal to the lengthy estimated price adjustment intervals forthcoming from applications of the Gali-Gertler empirical methodology as justification for the assumption of generalized price stickiness.
The adjustment interval, or the time between changes in your mortgage's interest rate.
You may be comfortable foregoing a longer adjustment interval or stringent caps, while instead searching for the lowest possible initial interest rate.
Likewise, if you're planning to stay in the home you're buying for just a few years, an ARM with an adjustment interval of five years would give you the advantages of a lower interest rate with none of the risks - as long as you sell before the five years are up.
Adjustment intervals typically range from one month to five years.
Another concern among servicers is the higher unit-servicing costs anticipated for ARMs, especially those with negative amortization, short adjustment intervals and the relatively few that have adjustable servicing fees.