Inflation Expectations And The Supply Chain

Author : Elías Albagli
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 42 pages
Book Rating : 4.52/5 ( download)

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Download or read book Inflation Expectations and the Supply Chain written by Elías Albagli and published by International Monetary Fund. This book was released on 2022-08-12 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: We show that firms rely on price changes observed along their supply chain to form expectations about aggregate inflation, and that these expectations have a complete pass-through to sales prices. Leveraging a unique dataset on Chilean firms merging expectation surveys and records from the VAT and customs registries, we document that changes in prices at which firms purchase inputs inform their forecasts of the economy’s inflation. This is the case even if changes in input costs do not determine the inflation outcome. These findings reject the full-information rational-expectations hypothesis and are consistent with firms’ disagreement about future inflation and inattention to macroeconomic news, which we document for Chile. Our results from a firm-level Phillips’ curve estimation suggest that firms’ beliefs about inflation are a key determinant for their price-setting decisions. Therefore, we argue that the channel we highlight in this paper has the potential to lead to dispersion in inflation expectations, price dispersion, and weaken the expectation channel of policies.

Author : Peter J. N. Sinclair
Publisher : Routledge
ISBN 13 : 1135179778
Total Pages : 402 pages
Book Rating : 4.79/5 ( download)

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Download or read book Inflation Expectations written by Peter J. N. Sinclair and published by Routledge. This book was released on 2009-12-16 with total page 402 pages. Available in PDF, EPUB and Kindle. Book excerpt: Inflation is regarded by the many as a menace that damages business and can only make life worse for households. Keeping it low depends critically on ensuring that firms and workers expect it to be low. So expectations of inflation are a key influence on national economic welfare. This collection pulls together a galaxy of world experts (including Roy Batchelor, Richard Curtin and Staffan Linden) on inflation expectations to debate different aspects of the issues involved. The main focus of the volume is on likely inflation developments. A number of factors have led practitioners and academic observers of monetary policy to place increasing emphasis recently on inflation expectations. One is the spread of inflation targeting, invented in New Zealand over 15 years ago, but now encompassing many important economies including Brazil, Canada, Israel and Great Britain. Even more significantly, the European Central Bank, the Bank of Japan and the United States Federal Bank are the leading members of another group of monetary institutions all considering or implementing moves in the same direction. A second is the large reduction in actual inflation that has been observed in most countries over the past decade or so. These considerations underscore the critical – and largely underrecognized - importance of inflation expectations. They emphasize the importance of the issues, and the great need for a volume that offers a clear, systematic treatment of them. This book, under the steely editorship of Peter Sinclair, should prove very important for policy makers and monetary economists alike.

Author : Zo Andriantomanga
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 41 pages
Book Rating : 4.36/5 ( download)

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Download or read book Global Supply Chain Disruptions: Challenges for Inflation and Monetary Policy in Sub-Saharan Africa written by Zo Andriantomanga and published by International Monetary Fund. This book was released on 2023-02-24 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Covid-19 pandemic has led to a large disruption of global supply chains. This paper studies the implications of supply chain disruptions for inflation and monetary policy in sub-Saharan Africa. Increases in supply chain pressures have had a sizeable impact on headline, food, and tradable inflation for a panel of 29 sub-Saharan African countries from 2000 to 2022. Our findings suggest that central banks can stabilize inflation and output more efficiently by monitoring global supply chains and adjusting the monetary policy stance before the disruptions have fully passed through into all inflation components. The gains from monitoring supply chain disruptions are particularly large for open economies which tend to experience outsized second-round effects on the prices of non-tradable goods and services.

Author : Mr. Serhan Cevik
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 31 pages
Book Rating : 4.23/5 ( download)

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Download or read book This Is Going to Hurt: Weather Anomalies, Supply Chain Pressures and Inflation written by Mr. Serhan Cevik and published by International Monetary Fund. This book was released on 2024-04-05 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: As climate change accelerates, the frequency and severity of extreme weather events are expected to worsen and have greater adverse consequences for ecosystems, physical infrastructure, and economic activity across the world. This paper investigates how weather anomalies affect global supply chains and inflation dynamics. Using monthly data for six large and well-diversified economies (China, the Euro area, Japan, Korea, the United Kingdom, and the United States) over the period 1997-2021, we implement a structural vector autoregressive model and document that weather anomalies could disrupt supply chains and subsequently lead to inflationary pressures. Our results—based on high-frequency data and robust to alternative estimation methodologies—show that these effects vary across countries, depending on the severity of weather shocks and vulnerability to supply chain disruptions. The impact of weather shocks on supply chains and inflation dynamics is likely to become more pronounced with accelerating climate change that can have non-linear effects. These findings have important policy implications. Central bankers should consider the impact of weather anomalies on supply chains and inflation dynamics to prevent entrenching second-round effects and de-anchoring of inflation expectations. More directly, however, governments can invest more for climate change adaptation to strengthen critical infrastructure and thereby minimize supply chain disruptions.

Author : Brent H. Meyer
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.04/5 ( download)

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Download or read book The Impact of Supply Chain Disruptions on Business Expectations During the Pandemic written by Brent H. Meyer and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using the Federal Reserve Bank of Atlanta's Business Inflation Expectations (BIE) survey, which has been continuously collecting subjective probability distributions over own-firm future unit costs since October 2011, we document two facts about firms' marginal cost expectations and risk during the COVID-19 pandemic. First, in the early months of the pandemic, firms, on net, saw COVID-19 largely as a demand shock and lowered their one-year-ahead expectations. However, as the pandemic wore on, firms' one-year-ahead unit cost expectations rose sharply alongside their views on supply chain and operating capacity disruptions. Second, the balance of unit cost risks shifted sharply over the course of the pandemic, and by the end of 2022, upside risks had sharply outweighed perceived downside risks during the year ahead. We find that both positive demand shocks (for example, large order backlogs) and negative supply shocks (such as long supplier delivery times and labor shortages) have contributed to elevated short-term unit cost expectations and risk. Specifically, supply shocks accounted for roughly 40 percent of the increase in manufacturers' and nearly onethird of service-providers' unit cost expectations.

Author : Viral V. Acharya
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.37/5 ( download)

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Download or read book How Do Supply Shocks to Inflation Generalize? Evidence from the Pandemic Era in Europe written by Viral V. Acharya and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Author : Brent H. Meyer
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.94/5 ( download)

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Download or read book The Impact of the COVID-19 Pandemic on Business Expectations written by Brent H. Meyer and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We document and evaluate how businesses are reacting to the COVID-19 crisis through August 2020. First, on net, firms see the shock (thus far) largely as a demand rather than supply shock. A greater share of firms reports significant or severe disruption to sales activity than to supply chains. We compare these measures of disruption to their expected changes in selling prices and find that, even for firms that report supply chain disruption, they expect to lower near-term selling prices on average. We also show that firms are engaging in wage cuts and expect to trim wages further before the end of 2020. These cuts stem from firms that have been disproportionally negatively affected by the pandemic. Second, firms (like professional forecasters) have responded to the COVID-19 pandemic by lowering their one-year-ahead inflation expectations. These responses stand in stark contrast to that of household inflation expectations (as measured by the University of Michigan or the New York Fed). Indeed, firms' one-year-ahead inflation expectations fell precipitously (to a series low) following the onset of the pandemic, while household measures of inflation expectations jumped markedly. Third, despite the dramatic decline in firms' near-term inflation expectations, their longer-run inflation expectations remain reasonably well anchored.

Author : Ulas Akkucuk
Publisher :
ISBN 13 : 9781668458778
Total Pages : 0 pages
Book Rating : 4.72/5 ( download)

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Download or read book Managing Inflation and Supply Chain Disruptions in the Global Economy written by Ulas Akkucuk and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: "This book deals scientifically with this post pandemic phenomenon of rising prices and supply chain disruptions that are expected to become a permanent issue that will affect all countries, and highlights way for the business community to deal with it"--

Author : Jakub Mućk
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.62/5 ( download)

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Download or read book Supply Chains Shocks and Inflation in Europe written by Jakub Mućk and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Author : Michael J. Artis
Publisher :
ISBN 13 :
Total Pages : 312 pages
Book Rating : 4.11/5 ( download)

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Download or read book Demand Management, Supply Constraints and Inflation written by Michael J. Artis and published by . This book was released on 1982 with total page 312 pages. Available in PDF, EPUB and Kindle. Book excerpt: Monograph of essays examining economic theory trends relating to supply constraints, inflation and consumer demand management in UK economic policies - discusses labour supply, unemployment, absenteeism, normal-cost hypothesis of pricing, fiscal policy effects, the impact of public expenditure, wages, incomes policies, economic concentration and industrial structure, etc. Graphs and references.