Firm Inflation Uncertainty / Ivan Yotzov, Lena Anayi, Nicholas Bloom, Philip Bunn, Paul Mizen, Özgen Öztürk, Gregory Thwaites.

Format:

Book

Author/Creator:

Yotzov, Ivan.

Contributor:

National Bureau of Economic Research.

Anayi, Lena.

Bloom, Nicholas.

Bunn, Philip.

Mizen, Paul.

Öztürk, Özgen.

Thwaites, Gregory.

Series:

Working Paper Series (National Bureau of Economic Research) no. w31300.

NBER working paper series no. w31300

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2023.

Summary:

We introduce a new measure of own-price inflation uncertainty using firm-level data from a large and representative survey of UK businesses. Inflation uncertainty increased significantly from the start of 2021 and reached a peak in the second half of 2022, even as a similar measure of sales uncertainty declined. We also find large cross-sectional differences in inflation uncertainty, with uncertainty particularly elevated for smaller firms and those in the goods sector. Finally, we show that firms which are more uncertain about their own price expectations experience higher forecast errors 12 months later. These findings suggest that studying inflation uncertainty at the firm level may be an important new dimension to understanding firm performance.

Notes:

Print version record

June 2023.