Firming up price inflation

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

POID Working Papers from Centre for Economic Performance, LSE

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.

Keywords: price inflation; data; panel survey; UK firms; Covid; pandemic; energy prices (search for similar items in EconPapers)
Date: 2022-12-15
New Economics Papers: this item is included in nep-ene and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://poid.lse.ac.uk/textonly/publications/downloads/poidwp058.pdf (application/pdf)

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)
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:cep:poidwp:058

Access Statistics for this paper

More papers in POID Working Papers from Centre for Economic Performance, LSE
Bibliographic data for series maintained by ().