|
|
Working Paper Series in Economics
| All 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 |
-
No. wp2024-7
(Download at EconPapers)
- Gerda Kirpson
- Consumer inflation expectations
before and after the 2022 inflation spike:
the role of perceived and realised inflation
This paper examines how the formation of consumer inflation expectations in
the euro area changed following the inflation spike in 2022, focusing on the
relationship between expected, perceived and realised inflation. The study uses
individual-level panel data from the European Central Bank’s Consumer
Expectation Survey and employs a mixed-method approach to estimate fixed and
random effects across two sub-periods. It finds that before 2022, inflation
perceptions influenced expectations strongly, while realised inflation had no
impact, but from 2022 onwards, the influence of perceptions on expectations was
reduced, and realised inflation mattered. The findings, which are robust across
different specifications and country-level analyses, align with the rational
inattention theory, suggesting that attention to inflation information shifts with
economic conditions
- JEL-Codes: D84; E31; E58
- Keywords: consumer inflation expectations, inflation perceptions, survey data, rational inattention, Consumer Expectation Survey (CES)
-
No. wp2024-6
(Download at EconPapers)
- Ludmila Fadejeva, Valentin Jovanceau and Alari Paulus
- Consumer price rigidity in the Baltic states
during periods of low and high inflation
The Baltic states experienced the most substantial consumer price inflation of any of the
EU countries shortly after the COVID-19 pandemic. The year-on-year all-items inflation
rate averaged 11% from January 2021 to September 2023, peaking at around 22% in late
2022. This study examines how consumer price rigidity in the region during this period
of high inflation differed from the preceding period of low inflation in 2019-2020. We use
the detailed price records that underlie the official consumer price indexes to assess the
frequency and the size margins of price changes. The average frequency of price changes
increased by about four percentage points when inflation was high, as an increase of five
percentage points in the frequency of price increases combined with a fall of one percentage
point in the frequency of price cuts. The average size of price changes increased by 2.8
percentage points, mainly because the share of price increases changed. We further show
that structural shocks in energy prices and aggregate demand contributed significantly to
fluctuations in the inflation rate through the frequency of price changes during the period
of high inflation. All this points to pricing being state-dependent in the Baltic states.
- JEL-Codes: D40, E31
- Keywords: consumer price rigidity, price-setting, high inflation, frequency of price changes
-
No. wp2024-5
(Download at EconPapers)
- Tibor Lalinsky, Jaanika Merikyll and Paloma Lopez-Garcia
- Productivity-enhancing reallocation
during the Covid-19 pandemic
This paper studies how the Covid-19 pandemic and the extensive job retention support that
accompanied it affected productivity in Europe. The focus is on the reallocation channel
and productivity-enhancing reallocation of jobs, following Foster et al., 2016. An extensive
micro-distributed analysis of firm-level data for 11 euro area countries is used. The
unique firm-level datasets are constructed by merging balance-sheet and income-statement
data with policy support data. The paper exploits variation in employment responsiveness
to productivity over time, particularly examining the relationship between changes in
employment responsiveness and the job retention support in 2020 and studying how well
the support was targeted by firm productivity. Acknowledging limitations of a small set of
countries covered and occasionally large confidence bounds around estimates, the findings
suggest that (1) productivity-enhancing reallocation was weaker in the pandemic than in
the Great Recession; (2) The countries that were more generous with job retention support
and countries where more support was allocated to low-productivity firms showed weaker
productivity-enhancing reallocation in 2020.
- JEL-Codes: D22, H25, J38, L29
- Keywords: Productivity-enhancing reallocation, Covid-19, adjustment of firms, job retention support, cross-country analysis
|
|
|