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Abstract
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Before
In this study we investigate the interaction of firms’ price and wage setting behaviour and their inflation expectations. This wave is conducted to provide increase general validity of our previous RCT and control for additional aspects (e.g. cost expectations). In particular, we study how inflation expectations are passed through into prices and wages. While theoretically there is a broad consensus about the relevance of the price setting of firms for inflation as well as economic activity, we know relatively little about how and to what extent firms build their inflation expectations into their prices and wages. We analyse these questions using a new firm-level survey with an RCT design that we conduct in Switzerland. Switzerland provides an ideal setting as it has a history of low and stable inflation and a flexible labor market with a low degree of wage indexation. Besides eliciting firm specific variables, and expectations about prices and wages we provide firms with information treatments and scenarios. Treatments in this study are used to either allude to forecasts at different horizons. We hope that we will be able to provide new insights on the role of expectations for firms’ decision making.
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After
In this study, we investigate the interaction of firms’ price- and wage-setting behavior and their inflation expectations. This wave is conducted to increase the general validity of our previous RCT and to control for additional aspects (e.g., cost expectations). In particular, we study how inflation expectations are passed through into prices and wages. While there is a broad theoretical consensus about the relevance of firms’ price-setting for inflation and economic activity, we know relatively little about how, and to what extent, firms build their inflation expectations into their prices and wages. We analyze these questions using a new firm-level RCT survey conducted in Switzerland. Switzerland provides an ideal setting, as it has a history of low and stable inflation and a flexible labour market with a low degree of wage indexation. Besides eliciting firm-specific variables and expectations about prices, wages and costs, we provide firms with information treatments and scenarios. Treatments in this study provide information on forecasts at different horizons. We hope to provide new insights into the role of expectations in firms’ decision-making.
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Last Published
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March 19, 2026 12:02 PM
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After
October 01, 2026 11:58 AM
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Experimental Design (Public)
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Before
The survey participants are representatives from Swiss firms, which are invited to participate in an online survey. The firms are sampled according to industry classification (NOGA) and size (full time employees).
In this online survey, we first elicit inflation expectations, and firms’ expectations about their own wages and prices, in addition to collecting information about the firms’ price and wage setting processes. After this, firms are randomly selected into groups where different information is provided. Information that is provided is the most recent inflation forecast of the Swiss National Bank for the short run (1 year ahead) and the medium run (3-5 years ahead).
After the information treatment, they are asked whether they would like to adjust their previously voiced expectations in light of the information treatment provided.
We plan to study how price and wage setting behavior interacts with inflation expectations and how changes in inflation expectations are passed through into prices and wages and to what extent different information treatments change inflation expectations and potentially feed through into prices and wages. The survey is conducted in German, French, Italian and English.
As this is a follow-up analysis which builds on a previous RCT (AEARCTR-0010464). The detailed econometric analysis and data cleaning process is described in the working paper: "Inflation Expectation Pass-Through into Prices and Wages: Evidence from an RCT Survey", (2024) with Klaus Abberger, Anne-Kathrin Funk, Michael Lamla, and Stefanie Siegrist, CEPR Discussion Paper No 19595
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After
The survey participants are representatives from Swiss firms who are invited to participate in an online survey. The firms are sampled according to industry classification (NOGA) and size (by number of full-time employees).
In this online survey, we first elicit inflation expectations and firms’ expectations about their own wages and prices, in addition to collecting information about the firms’ price- and wage-setting processes. After this, firms are randomly assigned to groups that receive different information. The information provided is the Swiss National Bank’s most recent inflation forecast for the short run (one year ahead) and the medium run (three to five years ahead).
After the information treatment, participants are asked whether they would like to adjust their previously stated expectations in light of the information provided. We plan to study how price- and wage-setting behavior interacts with inflation expectations; how changes in inflation expectations are passed through into prices, wages and costs; and to what extent different information treatments change inflation expectations and potentially feed through into prices, wages and costs. The survey is conducted in German, French, Italian, and English.
As this is a follow-up analysis that builds on a previous RCT (AEARCTR-0010464), the detailed econometric analysis and data-cleaning process are described in the working paper “Inflation Expectation Pass-Through into Prices and Wages: Evidence from an RCT Survey” (2024) by Klaus Abberger, Anne-Kathrin Funk, Michael Lamla, and Stefanie Siegrist, CEPR Discussion Paper No. 19595.
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Planned Number of Clusters
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Before
The RCT has two treatment groups and one control group. Each treatment group has the same size. The questionaire has been send out to approx 12500 firms.
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After
The RCT has two treatment groups and one control group. Each treatment group is the same size. The questionnaire has been sent to approximately 12500 firms.
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Planned Number of Observations
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Before
The questionaire has been send out to approx 12500 firms. We collected appox 3900 responses.
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After
The questionnaire has been sent to approximately 12500 firms. We have collected approximately 3900 responses.
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