TY  - RPRT
        AU  - Gorodnichenko, Yuriy
AU  - Melnick, Rafi
AU  - Kutai, Ari
        TI  - Information and the Formation of Inflation Expectations by Firms: Evidence from a Survey of Israeli Firms
        PY  - 2023/Jul/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 16334
        UR  - https://www.iza.org/publications/dp16334
        AB  - This study analyzes how firms form their inflation expectations during a regime change in monetary policy and a transition to a low-inflation environment. Using the Bank of Israel survey of firms, we document the basic properties of firms' inflation expectations and examine how Israeli firms update their inflation expectations after receiving new information about inflation or monetary policy. We find that even after successful de-dollarization and disinflation a positive inflation surprise leads to a sizable upward adjustment in inflation expectations for the next year and quarter. A surprise hike in the monetary interest rate leads to a downward adjustment in inflation expectations.
        KW  - monetary policy
KW  - surveys
KW  - firms
KW  - inflation expectations
        ER  -