Firms’ Inflation and Wage Expectations During the Inflation Surge

Erwan Gautier, Frédérique Savignac and Olivier Coibion

No 33799, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using a new survey of French firms spanning the full 2020–2025 inflation cycle, we document that de-anchoring and passthrough decoupled during the inflation surge: the firms whose expectations drifted furthest from target were precisely those that did not act on them, while firms that embedded expectations into wages and prices remained relatively well anchored. A growing tail of firms expected persistently high inflation — “inflation disasters” — but these were disproportionately smaller, less attentive firms extrapolating local cost pressures. As a result, the surge in expectations did not generate wage-price dynamics, limiting the scope for a self-sustaining inflation spiral.

JEL-codes: E30 E4 E5 (search for similar items in EconPapers)
Date: 2025-05
New Economics Papers: this item is included in nep-eur and nep-mon
Note: EFG ME
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.nber.org/papers/w33799.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
Working Paper: Firms’ Inflation and Wage Expectations during the Inflation Surge (2025)
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:nbr:nberwo:33799

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w33799
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().