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Determinants of inflation expectations of firms in the SAFE

Author

Listed:
  • Ferrando, Annalisa
  • Lamboglia, Sara
  • Rariga, Judit

Abstract

This box explores the factors shaping the euro area inflation expectations of firms in the survey on the access to finance of enterprises (SAFE). It finds that the short-term inflation expectations of firms are more volatile and closely tied to current inflation trends compared with their medium-term and long-term expectations. The determinants of these expectations considered in the analysis include the individual characteristics of firms, the sectors these operate in, their country of operation, their anticipated business decisions and euro area inflation. Among these factors, individual characteristics emerge as the primary driver of cross-section variation in inflation expectations of firms, followed by country-specific factors. At the same time, the uncertainty surrounding firms’ five-year inflation expectations is mainly influenced by the country in which they operate. JEL Classification: C83, E20, E31, E52

Suggested Citation

  • Ferrando, Annalisa & Lamboglia, Sara & Rariga, Judit, 2025. "Determinants of inflation expectations of firms in the SAFE," Economic Bulletin Boxes, European Central Bank, vol. 4.
    • Handle: RePEc:ecb:ecbbox:2025:0004:6
    Note: 235236
    as

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    More about this item

    Keywords

    firms; inflation expectations; Survey data;
    All these keywords.

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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