%0 Report
        %A Buchheim, Lukas
%A Link, Sebastian
%A Möhrle, Sascha
        %T Inflation and Wage Expectations of Firms and Employees
        %D 2024
        %8 2024 Sep
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 17269
        %U https://www.iza.org/publications/dp17269
        %X We study the link between expected inflation and wages using novel panel data from German firms and employees. We find that pass-through—the percentage point change in wage growth given a one percentage point change in expected inflation—is small: 0.11–0.17 for firms and 0.03–0.07 for employees. Utilizing variation in the coverage length of collective agreements, we estimate that passthrough at the intensive margin is 1.4-2 times larger than average pass-through, highlighting the importance of wage rigidities for pass-through. Pass-through also rises with the bargaining power of employees. At the extensive margin, expected inflation has little effect on additional wage negotiations.
        %K wage expectations
%K inflation
%K pass-through
%K wage-price spirals
%K bargaining
%K firms
%K employees
%K survey data