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Working Paper
Supply Chain Networks and the Macroeconomic Expectations of Firms
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 ...
Working Paper
The Causal Effects of Expected Depreciations
We estimate the causal effects of a shift in the expected future exchange rate of a local currency against the US dollar on a representative sample of firms in an open economy. We survey a nationally representative sample of firms and provide the one-year-ahead nominal exchange rate forecast published by the local central bank to a random sub-sample of firm managers. The treatment is effective in shifting exchange rate and inflation expectations and perceptions. These effects are persistent and larger for non-exporting firms. Linking survey responses with administrative census data, we find ...
Working Paper
Immigrants' Legalization and Firms: Evidence from the 2007 EU Enlargement
How do firms respond to permanent changes in the legal status of a substantial group of migrants? We study the effects of the entry to the European Union of Bulgaria and Romania in the Italian labor market. This event was particularly relevant for Italy, where Romanians constitute approximately one fifth of the immigrant population. We use administrative employer-employee data on the universe of private-sector workers and an IV-DID design to identify the effects of this change in migrants' legal status on firms' personnel and performance. Firms exhibit an increase in the share of migrant ...
Journal Article
Firms’ Inflation Expectations During the Pandemic-Era Surge
Inflation expectations among businesses can affect how they set current prices. Firms’ expectations diverged from those of professional forecasters during the pandemic-era inflation surge and moved closer to household expectations. Analyzing firms’ survey data from 2018 to 2025 reveals three main patterns behind this shift: Businesses became more sensitive to current inflation perceptions, their longer-term expectations temporarily drifted up, and their perceptions of the Federal Reserve’s inflation goal increased. However, when inflation eventually moderated, the survey data show that ...
Journal Article
Do Banks Lend to Distressed Firms?
Concerns emerged during the COVID-19 pandemic over banks continuing to lend to unproductive businesses that were close to default. Recent research shows that lenders have incentives to offer relatively better terms to less-productive and more-indebted firms to recover their prior investments. U.S. loan-level data confirm the empirical relevance of such lending behavior. A rich model of firms and banks further emphasizes that this type of lending can also depress overall productivity by sustaining firms that should otherwise exit the economy.
Journal Article
Consumer and Firm Perceptions of the Aggregate Labor Market Conditions
In the pre-pandemic period, measures of consumer labor market perceptions correlated well with the aggregate unemployment rate. However, for more than a year during the pandemic, consumers perceived labor markets as much tighter than the high aggregate unemployment rate implied. In contrast, there is no such a departure from the historic relation if we use the jobless unemployment rate-unemployment for reasons other than temporary layoffs-as a measure of labor market tightness. Using a measure of the firm labor market perceptions from the National Federation of Independent Business, we find ...
Working Paper
China's Exporters and Importers: Firms, Products, and Trade Partners
This paper provides a detailed overview of China’s participation in international trade using newly available data on the universe of globally engaged Chinese firms over the 2003-2005 period. We document the distribution of trade flows and product- and trade-partner intensity across both exporting and importing firms and study the relationship between firms’ intensive and extensive margins of trade. We also compare trade patterns across firms of different organizational structure, distinguishing between domestic private firms, domestic state‐owned firms, foreign-owned firms, and joint ...
Working Paper
Monetary Transmission through Bank Securities Portfolios
We study the transmission of monetary policy through bank securities portfolios using granular supervisory data on U.S. bank securities, hedging positions, and corporate credit. Banks that experienced larger losses on their securities during the 2022-2023 monetary tightening cycle extended less credit to firms. This spillover effect was stronger for available-for-sale securities, unhedged securities, and banks that must include unrealized gains and losses in their regulatory capital. A structural model, disciplined by our cross-sectional regression estimates, shows that interest rate ...
Working Paper
The Rise of AI Pricing: Trends, Driving Forces, and Implications for Firm Performance
We document key stylized facts about the time-series trends and cross-sectional distributions AI pricing and study its implications for firm performance, both on average and in response to monetary policy shocks. We use the online job postings data from Lightcast to measure the adoption of AI pricing. We infer that a firm is adopting AI pricing if it posts a job that requires AI-related skills and contains the keyword “pricing.” At the aggregate level, the share of AI pricing jobs in all pricing jobs has increased more than tenfold since 2010. The rise of AI pricing jobs has been ...
Working Paper
Do Inflation Expectations Become More Anchored During a Disinflation Episode? Evidence for Euro Area Firms
Does a successful disinflation contribute to the anchoring of inflation expectations? We provide novel survey evidence on the dynamics of euro area firms’ inflation expectations during the disinflation episode since 2022. We show that firms’ short-term inflation expectations declined steadily towards the inflation target as the disinflation progressed. However, we also document a thick tail in longer-term inflation expectations, substantial disagreement about the inflation outlook, and an increased sensitivity of longer-term inflation expectations to short-term inflation expectations. ...