A0409
Title: Determinants of firms pricing in the UK - expectations and industry-level complementarities
Authors: Cristina Griffa - University of Nottingham (United Kingdom)
Galina Potjagailo - Bank of England (United Kingdom) [presenting]
Abstract: Firm-level survey data UK is exploited to examine the determinants of firm pricing in the United Kingdom. A panel of firms' perceptions and expectations of prices and wage costs is used, to retrieve the role of expectations and marginal costs while accounting for the characteristics of the industry that the firm operates in and for the firms' expectations about prices in their industry. The heterogeneity is investigated between the manufacturing and service sectors with regard to price stickiness and the role that expectations play in price setting. This can shed light on heterogeneity in the inflationary process that might be overlooked when estimating aggregate level Phillips curves. It can inform monetary policy for understanding how heterogeneities in nominal rigidities can matter for inflation persistence.
