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Price Pass-Through Along the Supply Chain:Evidence from PPI and CPI Microdata

Author

Listed:
  • Ahlander, Edvin

    (Research Department, Central Bank of Sweden)

  • Carlsson, Mikael

    (Uppsala University, UCLS and Sveriges Riksbank, Research Division)

  • Klein, Mathias

    (Research Department, Central Bank of Sweden)

Abstract

We examine the pass-through from producer to consumer prices, using product-group data derived from the microdata underlying the official Swedish PPI and CPI indices. We find a robust pass-through, in line with theoretical models emphasizing production inter-linkages between sectors. The results also display important heterogeneity in pricing behavior both along the supply chain, as well as across product groups. That is, upstream pricing seems much more rigid than downstream pricing in the supply chain and the pass-through across CPI products varies substantially with price-change frequencies. The recent COVID- and high-inflation periods do not change the main results.

Suggested Citation

  • Ahlander, Edvin & Carlsson, Mikael & Klein, Mathias, 2023. "Price Pass-Through Along the Supply Chain:Evidence from PPI and CPI Microdata," Working Paper Series 426, Sveriges Riksbank (Central Bank of Sweden).
    • Handle: RePEc:hhs:rbnkwp:0426
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    References listed on IDEAS

    as
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    4. Todd E. Clark, 1995. "Do producer prices lead consumer prices?," Economic Review, Federal Reserve Bank of Kansas City, vol. 80(Q III), pages 25-39.
    5. A. Colin Cameron & Douglas L. Miller, 2015. "A Practitioner’s Guide to Cluster-Robust Inference," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 317-372.
    6. David Baqaee & Emmanuel Farhi, 2022. "Supply and Demand in Disaggregated Keynesian Economies with an Application to the COVID-19 Crisis," American Economic Review, American Economic Association, vol. 112(5), pages 1397-1436, May.
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    Keywords

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    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • 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

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