IDEAS home Printed from https://ideas.repec.org/p/fip/fedcwq/101377.html
   My bibliography  Save this paper

Supply Chain Networks and the Macroeconomic Expectations of Firms

Author

Listed:
  • Ina Hajdini
  • Saten Kumar
  • Samreen Malik
  • Jordan J. Norris
  • Mathieu Pedemonte

Abstract

In a randomized control trial of customer-supplier firm pairs in New Zealand, we treat with information one firm in a pair and analyze the treatment's effects on the expectations and actions of both the directly treated firms (direct effect) and connected firms that did not directly receive information (spillover effect). The direct and spillover effects on expectations and actions are significant and of comparable magnitude. Higher expected future real GDP growth increases prices and employment, while greater uncertainty about it reduces prices, investment, and employment. We show that spillover effects on the connected firms' expectations are driven by inter-firm communication, as opposed to observable actions. This matters as we find communication to be symmetric upstream vs downstream, while propagation via actions is asymmetric. We embed inter-firm communication along the supply chain in a New Keynesian pricing problem and discuss implications for the transmission of aggregate uncertainty to prices and inflation.

Suggested Citation

  • Ina Hajdini & Saten Kumar & Samreen Malik & Jordan J. Norris & Mathieu Pedemonte, 2025. "Supply Chain Networks and the Macroeconomic Expectations of Firms," Working Papers 25-17, Federal Reserve Bank of Cleveland.
    • Handle: RePEc:fip:fedcwq:101377
    DOI: 10.26509/frbc-wp-202517
    as

    Download full text from publisher

    File URL: https://doi.org/10.26509/frbc-wp-202517
    File Function: Persistent link
    Download Restriction: no
    File URL: https://www.clevelandfed.org/-/media/project/clevelandfedtenant/clevelandfedsite/publications/working-papers/2025/wp2517.pdf
    File Function: Full text
    Download Restriction: no
    File URL: https://libkey.io/10.26509/frbc-wp-202517?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

    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:fip:fedcwq:101377. 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: 4D Library (email available below). General contact details of provider: https://edirc.repec.org/data/frbclus.html .

    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.