Universität Bonn

Department of Economics

Sarah Lein - University of Basel

“The Pass-Through of Inflation Expectations into Prices and Wages: Evidence from an RCT Survey”

Abstract

This paper analyzes the pass-through of inflation expectations into the prices and wages set by firms. We conduct a survey of firms using a tailored questionnaire, incorporating randomized information treatments to generate exogenous variation in inflation expectations. Our findings show that changes in inflation expectations influence both wages and prices, though the pass-through is incomplete. Moreover, we find that short-term inflation expectations have higher pass-through coefficients than long-term expectations, particularly for prices. The pass-through is conditional on firms' underlying price-setting behavior. To validate our results, we use a hypothetical vignette that does not rely on information treatments and find similar pass-through coefficients.

Additional information:

  • Speaker: Sarah Lein
  • Time: Wednesday, 30.10.2024, 12:15 - 14:00
  • Location: Faculty Meetingroom, U 1.040
  • Further links:
  • Organizer: Finance Group joint with Macro Group
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