Inflation expectations are a fundamental determinant of the economic decisions taken by households and firms. We assess the role of several factors that could contribute to shaping Italian firms' expectations. We exploit individual data covering the period 1999-2017, as collected in the Survey on Inflation and Growth Expectations conducted by Banca d'Italia and Il Sole 24 Ore.
The estimates show that wage increases negotiated at the sectoral level as part of collective bargaining agreements have a positive and statistically significant effect on inflation expectations across all the time horizons considered. Even changes in the cost of raw materials and of gasoline prices have a positive impact on expectations.
Published in 2021 in: Empirical Economics, v. 61, 4, pp. 2449-2475
