Contracts and firms’ inflation expectations

Saten Kumar and Dennis Wesselbaum

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: We use novel survey data to study firms’ inventory contracts. We document facts about the usage of purchase and sale contracts. We find that firms purchase and sell inventory through three contractual arrangements: fixed price and quantity, fixed price only, and fixed quantity only. The former holds the largest share of contracts. The average duration of purchase contracts is not very different from the average duration of sale contracts. We then find that the upward bias in inflation expectations is a feature of firms that do not purchase or sell largely through contracts. Our findings are useful in the calibration of sticky price models.

Keywords: Contracts; Inflation Expectations; Survey (search for similar items in EconPapers)
JEL-codes: C83 D84 D86 E31 L14 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2021-10
New Economics Papers: this item is included in nep-cwa, nep-mac and nep-mon
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https://cama.crawford.anu.edu.au/sites/default/fil ... kumar_wesselbaum.pdf (application/pdf)

Related works:
Journal Article: Contracts and Firms' Inflation Expectations (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2021-85

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