Which Macroeconomic News Matters for Price-Setting?

Lukas Hack and Davud Rostam-Afschar

No 12215, CESifo Working Paper Series from CESifo

Abstract: We examine how macroeconomic news affects firms’ extensive-margin price-setting plans in a survey that we rolled out with randomized daily invitations. These plans predict future realized inflation. Using a high-frequency event study framework, we find that inflation and employment surprises imply significant and sizable revisions in firms' pricing plans. There is a limited role for news about the trade balance, but no significant role for other commonly studied data releases, e.g., industrial production. We also study news coverage and agents' news search behavior, finding that the intensive-margin response of media coverage and news search may partly drive our main results.

Keywords: daily data; firms; price-setting; macroeconomic data releases (search for similar items in EconPapers)
JEL-codes: C83 E30 E31 E32 (search for similar items in EconPapers)
Date: 2025
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Working Paper: Which Macroeconomic News Matters for Price-Setting? (2025)
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