Which macroeconomic news matters for price-setting?

Lukas Hack, Davud Rostam-Afschar

We examine how macroeconomic news affects firms' extensive-margin price-setting plans in a survey that we rolled out with randomized daily invitations. These plans predict future realized inflation. Using a high-frequency event study framework, we find that inflation and employment surprises imply significant and sizable revisions in firms' pricing plans. There is a limited role for news about the trade balance, but no significant role for other commonly studied data releases, e.g., industrial production. We also study news coverage and agents' news search behavior, finding that the intensive-margin response of media coverage and news search may partly drive our main results.

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Year of publication:	May 2025
Authors:	Hack, Lukas ; Rostam-Afschar, Davud
Publisher:	Bonn, Germany : IZA - Institute of Labor Economics
Subject:	daily data \| firms \| price-setting \| macroeconomic data releases \| Ankündigungseffekt \| Announcement effect \| Preismanagement \| Pricing strategy \| Schätzung \| Estimation \| Preisrigidität \| Price stickiness \| Volatilität \| Volatility

Extent:	1 Online-Ressource (circa 60 Seiten) Illustrationen
Series:	Discussion paper series / IZA. - Bonn : IZA, ZDB-ID 2120053-1. - Vol. no. 17935
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper
Language:	English
Other identifiers:	hdl:10419/320529 [Handle]
Classification:	E30 - Prices, Business Fluctuations, and Cycles. General ; E31 - Price Level; Inflation; Deflation ; E32 - Business Fluctuations; Cycles ; C83 - Survey Methods; Sampling Methods
Source:	ECONIS - Online Catalogue of the ZBW

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