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Forward-looking inflation is central to monetary economics
A micro building block of such foresight is Intertemporal Pass-Through (iPT): the sensitivity of firms' current reset prices to expected marginal costs
We estimate iPT and find it consistent with sticky-price models
A micro building block of such foresight is Intertemporal Pass-Through (iPT): the sensitivity of firms' current reset prices to expected marginal costs
We estimate iPT and find it consistent with sticky-price models
Absolutely thrilled to share a new working paper, joint with @mickey_gb and @boromeuswView quoted post on X
We study ‘Intertemporal pass-through’ (iPT) - the sensitivity of firms’ desired prices to changes in expected future marginal costs.
Link: bankofengland.co.uk/working-paper/…
A short 🧵