IDEAS home Printed from https://ideas.repec.org/a/ijc/ijcjou/y2024q1a3.html
   My bibliography  Save this article

Demand or Supply? Price Adjustment Heterogeneity during the COVID-19 Pandemic

Author

Listed:
  • Almut Balleer

    (RWI Essen, TU Dortmund, IIES Stockholm, CESifo, and CEPR)

  • Sebastian Link

    (ifo Institute, LMU Munich, IZA, and CESifo)

  • Manuel Menkhoff

    (ifo Institute and LMU Munich)

  • Peter Zorn

    (LMU Munich and CESifo)

Abstract

We study price-setting behavior and subjective perceptions in German firm-level survey data to infer the relative importance of supply and demand during the COVID-19 pandemic. Demand shortages dominate at the onset of the pandemic. A reported negative impact of COVID-19 on current business is associated with a rise in the probability to decrease prices up to 10 percentage points in this episode. Supply forces gain in importance during the ensuing sudden surge in inflation and firms perceive goods supply shortages as most restrictive. Firms adversely affected during the early inflation decline show no higher probability of price increases. Journal: International Journal of Central Banking

Suggested Citation

  • Almut Balleer & Sebastian Link & Manuel Menkhoff & Peter Zorn, 2024. "Demand or Supply? Price Adjustment Heterogeneity during the COVID-19 Pandemic," International Journal of Central Banking, International Journal of Central Banking, vol. 20(1), pages 93-157, February.
    • Handle: RePEc:ijc:ijcjou:y:2024:q:1:a:3
    as

    Download full text from publisher

    File URL: http://www.ijcb.org/journal/ijcb24q1a3.pdf
    Download Restriction: no
    ---><---

    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ijc:ijcjou:y:2024:q:1:a:3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bank for International Settlements (email available below). General contact details of provider: https://www.ijcb.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.