TY  - RPRT
        AU  - Buchheim, Lukas
AU  - Link, Sebastian
AU  - Möhrle, Sascha
        TI  - Inflation and Wage Expectations of Firms and Employees
        PY  - 2024/Sep/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 17269
        UR  - https://www.iza.org/publications/dp17269
        AB  - 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.
        KW  - wage expectations
KW  - inflation
KW  - pass-through
KW  - wage-price spirals
KW  - bargaining
KW  - firms
KW  - employees
KW  - survey data
        ER  -