prisholdbarhet

Prisholdbarhet is a term used in Norwegian economics to describe the degree to which prices remain stable over time, despite fluctuations in supply, demand, or costs. It encompasses both intentional price maintenance by firms and the natural rigidity of prices caused by contracts, menu costs, and regulatory frameworks.

Several factors influence prisholdbarhet, including fixed-price contracts and long-term supply agreements, price-matching policies, regulatory price controls, subsidies, and currency or inflation expectations. Market structure and competition also matter: in highly competitive markets with low menu costs, prices tend to adjust more frequently, reducing holdbarhet.

Measurement of prisholdbarhet often looks at how frequently and by how much prices change, the typical duration of price levels before adjustments, and how changes in costs or demand are transmitted to consumer prices.

Benefits of higher prisholdbarhet include easier budgeting for households and firms, reduced short-term price volatility, and greater predictability in markets. Drawbacks can include reduced adaptability to shocks, the risk of misallocation when prices do not reflect resource scarcity, and potential distortions from price controls or subsidies.

Examples in practice include fixed-price promotions in retail, long-term supply contracts with price escalators, and regulated price ceilings for essential goods. Related concepts include price stability, menu costs, price rigidity, and inflation targeting.