Replication data for: Inflation Dynamics during the Financial Crisis
Principal Investigator(s): View help for Principal Investigator(s) Simon Gilchrist; Raphael Schoenle; Jae Sim; Egon Zakrajšek
Version: View help for Version V1
| Name | File Type | Size | Last Modified |
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| Replication_AER_2015_0248 | 10/12/2019 03:46:AM | ||
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text/plain | 14.6 KB | 10/11/2019 11:46:PM |
Project Citation:
Gilchrist, Simon, Schoenle, Raphael, Sim, Jae, and Zakrajšek, Egon. Replication data for: Inflation Dynamics during the Financial Crisis. Nashville, TN: American Economic Association [publisher], 2017. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E113043V1
Project Description
Summary:
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Using a novel dataset, which merges good-level prices underlying the PPI with the respondents' balance sheets, we show that liquidity constrained firms increased prices in 2008, while their unconstrained counterparts cut prices. We develop a model in which firms face financial frictions while setting prices in customer markets. Financial distortions create an incentive for firms to raise prices in response to adverse financial or demand shocks. This reaction reflects the firms' decisions to preserve internal liquidity and avoid accessing external finance, factors that strengthen the countercyclical behavior of markups and attenuate the response of inflation to fluctuations in output.
Scope of Project
JEL Classification:
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E31 Price Level; Inflation; Deflation
E32 Business Fluctuations; Cycles
E44 Financial Markets and the Macroeconomy
G01 Financial Crises
G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
L11 Production, Pricing, and Market Structure; Size Distribution of Firms
E31 Price Level; Inflation; Deflation
E32 Business Fluctuations; Cycles
E44 Financial Markets and the Macroeconomy
G01 Financial Crises
G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
L11 Production, Pricing, and Market Structure; Size Distribution of Firms
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