Firm-Level Input Price Changes and Their Effects: A Deep Learning Approach

Sudheer Chava, Wendi Du (), Indrajit Mitra, Agam Shah () and Linghang Zeng
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Agam Shah: https://www.cc.gatech.edu/people/agam-shah

No 2025-7, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta

Abstract: We develop firm-level measures of input and output price changes using textual analysis of earnings calls. We establish five facts: (1) Input prices increase (decrease) at the median firm once every seven (30) months. (2) Input price changes contain an equal blend of aggregate and firm-specific components. (3) A firm's stock price experiences a –1.15 percent return when our input price change measure is in the top tercile of price increases. (4) Our input price change measure predicts future changes in the cost of goods sold. (5) Firms pass through input price changes to output prices in the same quarter with a magnitude of 0.7.

Keywords: deep learning; input price; cost pass-through (search for similar items in EconPapers)
JEL-codes: D24 E12 E44 L11 (search for similar items in EconPapers)
Pages: 66
Date: 2025-08-19
New Economics Papers: this item is included in nep-big, nep-cmp and nep-ind
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Published in 2025

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DOI: 10.29338/wp2025-07

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