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Understanding Firm Dynamics with Daily Data

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  • Hack, Lukas
  • Rostam-Afschar, Davud
Abstract
How do firms respond to macroeconomic shocks? To study this question, we construct novel daily time series that measure firms’ plans and expectations based on surveys from Germany. Daily variation allows us to estimate the short-run aggregate responses of firms in short samples. This allows us to analyze the post-pandemic inflation surge without relying on pre-pandemic data. We find that firms’ plans, notably price-setting plans, respond within days to oil supply and monetary policy shocks but not to forward guidance shocks. The effects are especially strong for small and non-tradeable sector firms. Finally, expectations respond strongly and swiftly, but only to monetary policy.
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Suggested Citation

  • Hack, Lukas & Rostam-Afschar, Davud, 2024. "Understanding Firm Dynamics with Daily Data," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302376, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc24:302376
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    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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