Firm's Price Expectations: An Empirical Analysis using BCRAs' Survey of Business Economic Perspectives

Pedro Elosegui and Máximo Sangiácomo ()
Additional contact information
Máximo Sangiácomo: Central Bank of Argentina

No 2022103, BCRA Working Paper Series from Central Bank of Argentina, Economic Research Department

Abstract: The Central Bank of Argentina (BCRA) implements a monthly Survey of Business Economic Perspectives to capture the business climate and economic perspectives. The survey includes both qualitative and quantitative questions on past and expected change in different economic variables of the main companies in Argentina. This unique proprietary data is used to approximate the price setting behavior of the firms in the domestic markets. We postulate an econometric model where the firms’ dynamic on their expected domestic prices are based on (i) firm’s past and expected information (prices, input costs and inventories) and (ii) macroeconomic variables (economic activity, foreign exchange rate, interest rate and inflation rate). The results indicate the importance of input costs (domestic and imported) and the macroeconomic variables (especially the exchange rate and the inflation rate) in the expected price dynamics of the analyzed companies and are in line with the literature analyzing price setting behavior under macroeconomic uncertainty. Foreign exchange rate pass-through, markups on input prices and forward-looking behavior in price setting generate important challenges for the anti-inflationary monetary policy.

Keywords: survey data; price setting; firms expectations (search for similar items in EconPapers)
JEL-codes: D40 E30 E50 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2022-07
New Economics Papers: this item is included in nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.bcra.gob.ar/Institucional/DescargaPDF/DownloadPDF.aspx?Id=1058 English version (versión en inglés) (application/pdf)

Related works:
Journal Article: Firm's Price Expectations: An Empirical Analysis using BCRAs' Survey of Business Economic Perspectives (2024)
Working Paper: Firm’s Price Expectations: An Empirical Analysis using BCRAs’ Survey of Business Economic Perspectives (2023)
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:bcr:wpaper:2022103

Access Statistics for this paper

More papers in BCRA Working Paper Series from Central Bank of Argentina, Economic Research Department Contact information at EDIRC.
Bibliographic data for series maintained by Federico Grillo ().