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dc.titleSupply Chain Networks and the Macroeconomic Expectations of Firms
dc.contributor.authorHajdini, Ina
dc.contributor.authorKumar, Saten
dc.contributor.authorMalik, Samreen
dc.contributor.authorNorris, Jordan J.
dc.contributor.authorPedemonte, Mathieu
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coverageNew Zealand
dc.date.available2025-07-10T00:07:00
dc.date.issue2025-07-10T00:07:00
dc.description.abstractUsing a randomized control trial of approximately 1,000 firm pairs in New Zealand that have a customer-supplier relationship, we provide an information treatment to analyze both the direct effects on expectations and actions of firms receiving this information and the spillover effects on connected firms that did not directly receive information. In a follow-up three months later, we find direct and spillover effects on expectations and actions that are both significant and of comparable magnitude. An increase in expected GDP growth increases prices and employment; an increase in expected GDP uncertainty reduces prices, investment, and employment. We provide evidence that it is communication between the firms, as opposed to observable actions, driving the spillover effect on the expectations of connected firms. This is consequential as we find communication to be symmetric upstream vs downstream, while propagation via actions is asymmetric. We embed firm-to-firm communication along the supply chain in a New Keynesian pricing problem and discuss its implications for the transmission of aggregate uncertainty to firms pricing decisions and aggregate inflation.
dc.format.extent87
dc.identifier.doihttp://dx.doi.org/10.18235/0013598
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Supply-Chain-Networks-and-the-Macroeconomic-Expectations-of-Firms.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.subjectSmall Business
dc.subjectGross Domestic Product
dc.subjectService Provider
dc.subjectMacroeconomy
dc.subjectLabor
dc.subjectSupply Chain
dc.subjectGDP Growth
dc.subjectInvestment
dc.subjectInflation
dc.subject.jelcodeD80 - Information, Knowledge, and Uncertainty: General
dc.subject.jelcodeE50 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General
dc.subject.jelcodeE40 - Money and Interest Rates: General
dc.subject.jelcodeE30 - Prices, Business Fluctuations, and Cycles: General
dc.subject.jelcodeD81 - Criteria for Decision-Making under Risk and Uncertainty
dc.subject.jelcodeL14 - Transactional Relationships • Contracts and Reputation • Networks
dc.subject.keywordsFirms;Macroeconomic Expectations;Networks;spillovers
dc.typeWorking Papers
idb.identifier.pubnumberIDB-WP-01721
idb.operationRG-K1089
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