Skip to:
  1. Main navigation
  2. Main content
  3. Footer
Working Paper

Estimates of Cost-Price Passthrough from Business Survey Data

Download pdf
We examine businesses' price-setting practices via open-ended interviews and in a quantitative survey module with business contacts from the Federal Reserve Banks of Atlanta, Cleveland, and New York in December 2022 and January 2023. Businesses indicated that their prices were strongly influenced by demand, a desire to maintain steady profit margins, and wages and labor costs. Survey respondents expected reduced growth in costs and prices of about 5 percent on average over the next year. Backward-looking, forward-looking, and hypothetical scenarios reveal average cost-price passthrough of around 60 percent, with meaningful heterogeneity across firms.
Topics
Business cycles
Inflation
06.02.2023ISSN 2573-7953 WP 23-14DOI 10.26509/frbc-wp-202314
Keywords Prices, Business Survey, Hypothetical Questions
JEL Classification Codes D4, E3, L2

Working Papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment on research in progress. They may not have been subject to the formal editorial review accorded official Federal Reserve Bank of Cleveland publications. The views expressed in this paper are those of the authors and do not represent the views of the Federal Reserve Bank of Cleveland or the Federal Reserve System.

Suggested Citation

Dogra, Keshav, Sebastian Heise, Edward S. Knotek II, Brent Meyer, Robert W. Rich, Raphael S. Schoenle, Giorgio Topa, Wilbert van der Klaauw, and Wändi Bruine de Bruin. 2023. “Estimates of Cost-Price Passthrough from Business Survey Data.” Federal Reserve Bank of Cleveland, Working Paper No. 23-14. https://doi.org/10.26509/frbc-wp-202314