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

Edvin Ahlander (), Mikael Carlsson and Mathias Klein ()
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Edvin Ahlander: Research Department, Central Bank of Sweden, Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden
Mathias Klein: Research Department, Central Bank of Sweden, Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden

No 426, Working Paper Series from Sveriges Riksbank (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.

Keywords: Price pass-through; consumer and producer prices; microdata (search for similar items in EconPapers)
JEL-codes: E30 E31 E32 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2023-06-01
New Economics Papers: this item is included in nep-com, nep-eec and nep-mon
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