Business Costs and Consumer Price Inflation in Ireland

Stephen Byrne, Darragh McLaughlin and Martin O'Brien ()
Additional contact information
Darragh McLaughlin: Central Bank of Ireland

No 3/EL/22, Economic Letters from Central Bank of Ireland

Abstract: How do consumer prices respond as costs for businesses in Ireland change? In this Letter, we seek to answer this question by examining macroeconomic data. The response of profits, wages and productivity levels to a given rise in other input costs determines the extent of cost-push pass-through to consumer prices. We find that output prices of domestically-dominated sectors of the economy, which captures the dynamics of businesses responses to higher input costs, typically do play a role in explaining consumer price inflation in Ireland. Recent cost increases for businesses are expected to contribute to inflation remaining above pre-pandemic levels for the foreseeable future given the likely capacity of labour costs and profits to adjust.

Date: 2022-06
New Economics Papers: this item is included in nep-mon
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.centralbank.ie/docs/default-source/pub ... df?sfvrsn=4f49961d_5 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cbi:ecolet:3/el/22

Access Statistics for this paper

More papers in Economic Letters from Central Bank of Ireland Contact information at EDIRC.
Bibliographic data for series maintained by Fiona Farrelly ().