Firming up Price Inflation

Philip Bunn, Lena S. Anayi, Nicholas Bloom, Paul Mizen, Gregory Thwaites and Ivan Yotzov

No 30505, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use data from a large panel survey of UK firms to analyze the economic drivers of price setting since the start of the Covid pandemic. Inflation responded asymmetrically to movements in demand. This helps to explain why inflation did not fall much during the negative initial pandemic demand shock. Energy prices and shortages of labor and materials account for most of the rise during the rebound. Inflation rates across firms have become more dispersed and skewed since the start of the pandemic. We find that average price inflation is positively correlated with the dispersion and skewness of the distribution. Finally, we also introduce a novel measure of subjective inflation uncertainty within firms and show how this has increased during the pandemic, continuing to rise in 2022 even as sales uncertainty dropped back.

JEL-codes: C83 D22 D84 E31 (search for similar items in EconPapers)
Date: 2022-09
New Economics Papers: this item is included in nep-mon
Note: ME
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Citations: View citations in EconPapers (10)

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Related works:
Working Paper: Firming up price inflation (2023)
Working Paper: Firming up price inflation (2023)
Working Paper: Firming up price inflation (2022)
Working Paper: Firming up price inflation (2022)
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