A0211
Title: Oil shocks and firm-level expectations
Authors: Petre Caraiani - Bucharest University of Economic Studies (Romania) [presenting]
Abstract: Employing firm-level data from Germany, the aim is to investigate the influence of oil news on firms' economic expectations, specifically focusing on price and employment expectations. Through panel data analysis, it is demonstrated that oil news shocks precipitate a significant increase in firms' price expectations while concurrently diminishing their employment projections. Notably, the peak effect on price expectations manifests within 3-4 quarters, whereas employment expectations adjust more rapidly within just one month. The robustness of these findings is found across various types of oil news shocks and different firm sub-samples, underscoring the pervasive impact of oil news on economic forecasts at the firm level. The results also indicate new evidence for expectation formation, as the peak responses are reached after 3-4 months for prices and 6-9 months for employment. Oil news shocks also have a more lasting impact on employment expectations.
