Firms’ Inflation Expectations During the Phases of Inflation

Okan Akarsu and Huzeyfe Torun

CBT Research Notes in Economics from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: [EN] This study investigates how firms' inflation expectations evolve during both inflationary and disinflationary periods, using data from the Business Tendency Survey (BTS), and analyzes the relationship between firms' cost- and price-related expectations and their inflation forecasts. By matching firms based on their fundamental characteristics, and then employing probit models alongside propensity score matching, we estimate the average treatment effect on the treated (ATT) to assess changes in expectations as quasi-randomized treatments. Our results indicate a significant dispersion in inflation expectations during periods of rising inflation. However, as inflation stabilizes, firms' expectations begin to converge, signaling reduced uncertainty and closer alignment with central bank targets. This study adds to the literature by providing empirical evidence from an emerging market economy, offering valuable insights into how firm-level inflation expectations shift across different inflation phases and highlighting the role of monetary policy in anchoring these expectations. [TR] Bu calisma, Iktisadi Egilim Anketi (IYA) verilerini kullanarak firmalarin enflasyon beklentilerinin hem enflasyonist hem de dezenflasyonist donemlerde nasil degistigini Iktisadi Egilim Anketi (IYA) verilerini kullanarak incelenmekte ve firmalarin maliyet ve fiyatla ilgili beklentileri ile enflasyon tahminleri arasindaki iliskiyi analiz etmektedir. Firmalari temel ozelliklerine gore eslestirip, ardindan egilim puani eslestirme) yontemi ve probit modeller kullanilarak, beklentilerdeki degisiklikleri yari-rastgele tedaviler olarak degerlendirmek icin tedavi grubu uzerindeki ortalama etki tahmin edilmektedir. Bulgularimiz, enflasyonun yukseldigi donemlerde firmalarin enflasyon beklentilerinde onemli bir dagilim oldugunu gostermektedir. Ancak, enflasyon istikrar kazandikca, firmalarin beklentileri yakinsamaya baslamakta; bu da belirsizligin azaldigini ve beklentilerin merkez bankasi hedeflerine daha yakin hale geldigine isaret etmektedir. Bu calisma, gelismekte olan bir ulkeden elde edilen ampirik bulgularla mevcut literature katki saglamakta; firmalarin enflasyon beklentilerinin enflasyonun farkli evrelerinde nasil degistigine dair degerli bilgiler sunmakta ve bu beklentilerin cipalanmasinda para politikasinin rolunu vurgulamaktadir.

Date: 2025
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