Ivan Yotzov

Chart showing the expected impact of US tariffs over the year ahead from survey data of UK firms. Around 75% expect no impact on sales or investment. In the first half of 2025, the US and some of its trading partners announced significant changes to import tariffs. This column uses newly designed questions to study the impact of these changes on UK firms and to assess the level of trade uncertainty. On average, the majority of firms expect no material impact on their sales, investment, and prices; those that do expect it to be a relatively small negative impact. Tariffs are a new source of uncertainty for firms, although the level of uncertainty remains lower than for previous shocks such as Brexit, Covid-19, or the Russia-Ukraine war.

@paulmizen.bsky.social @iyotzov.bsky.social et al. study the impact of tariffs on UK firms. Using survey data, they find that, on average, the majority of firms expect no material impact on their sales, investment, and prices.
cepr.org/voxeu/column...
#EconSky

🌟NEW PAPER🌟

Forward-looking inflation is central to monetary economics

A micro building block of such foresight is Intertemporal Pass-Through (iPT): the sensitivity of firms' *current* reset prices to *expected* marginal costs

We estimate iPT and find it consistent with sticky-price models

Intertemporal pass-through Staff working papers set out research in progress by our staff, with the aim of encouraging comments and debate.

Joint work with Boromeus Wanengkirtyo and @iyotzov.bsky.social

Link: www.bankofengland.co.uk/working-pape...

TOMORROW (14 May): AYEW Political Economy Workshop!

Join us at 7pm AEST/ 10am BST to listen to Mohammad Mahdi Jafari (Sharif University of Technology), @alvarozc.bsky.social (@pse.bsky.social) & Jingshu Wen (@ox.ac.uk)

Sign up for Zoom details: monash.edu/business/imp...

TOMORROW (7 May): AYEW Labour Economics Workshop!

Join us at 11:00am BST to listen to Minali Grover (IIM Indore), Aicha Kharazi (@exeter.ac.uk) and Julian Tiedtke (Sant’Anna School of Advanced Studies)

Sign up for Zoom details: www.monash.edu/business/imp...

More details here: decisionmakerpanel.co.uk/wp-content/u...

@nickbloom.bsky.social @paulmizen.bsky.social @gthwaites.bsky.social @krishanshah.bsky.social

And firms which expect to lower wages have reported lower year-ahead expected wage growth.

Firms which expect to increase prices have reported higher year-ahead expected own-price growth…

Differences are already visible in expectations! Firms which expect to lower employees in response to higher NICs have reported lower expected employment growth since the Budget…

Firms expect to adjust along multiple margins - Lower profit margins, higher prices, lower employment, and lower wages. The majority expect to adjust along multiple margins.

🚨NEW POST

In April 2025, the increases in employer NICs announced in the Autumn Budget came into effect.

We use Decision Maker Panel (DMP) survey data to study how UK firms plan to adjust and the effects on expectations up to March 2025. 🧵

The UK will soon have a new industrial strategy. What can we learn from past policies, and from examining the sectors in the government's recent green paper?

Our new CMA report looks at the data.

https://www.gov.uk/government/publications/industrial-policies-new-evidence-for-the-uk

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Graphs of firms' inflation perceptions and expectations showing that they respond to changes in CPI inflation, not CPI surprises. Since 2021, developed countries have experienced a significant inflation episode. This column uses Decision Maker Panel data from UK CEOs and CFOs to study firms’ inflation perceptions and expectations around monthly official inflation releases. Firms’ expectations are most responsive when inflation coverage in the media is elevated, suggesting salience is a key issue, as the media focuses attention on data releases. Furthermore, firms respond to changes in headline inflation rates and not to surprises relative to professional forecasts. The results highlight a distinction between financial markets (‘Wall Street’) and firms (‘Main Street’), which should inform modelling of economic behaviour.

UK firms' inflation expectations are most responsive when inflation coverage in the media is elevated. This shows a distinction between expectations of financial markets vs. firms - important for economic modelling.
@iyotzov.bsky.social @paulmizen.bsky.social et al.
cepr.org/voxeu/column...
#EconSky

Check out our new @voxeu.org column which analyses how firm inflation perceptions/expectations respond to CPI inflation releases

Firms respond to changes in CPI inflation, not news relative to professional forecasts.

Full WP: www.nber.org/papers/w32731

cepr.org/voxeu/column...

TOMORROW (26 March): AYEW Urban Economics Workshop!

Join us at 11:00am GMT to listen to Jorge Páscoa Ferreira (Nova SBE), @cosentinopol.bsky.social (@sorbonneparis1.bsky.social) and Yutong Guo (@bristoluni.bsky.social)

Sign up for Zoom details: www.monash.edu/business/imp...

Season 10 is here!🎊🎉

TOMORROW (12 March, 11:00am GMT): Gender Economics Workshop!

@sarthakjoshi.bsky.social (@warwickecon.bsky.social),
Yifan Lyu (@sthlmschoolofecon.bsky.social),
@akanksha-vardani.bsky.social (@columbiauniversity.bsky.social)

Sign up for Zoom details:
monash.edu/business/imp...

#Research talk by @iyotzov.bsky.social (BoE) at @kofeth.bsky.social:

How Curvy is the Phillips Curve? - Convex, but only for high #inflation #firms (cf. figure).

www.nber.org/papers/w33234

Thanx @lukashack.bsky.social & @eneabaselgia.bsky.social!

Pic: Ivan, Remo Gurtner & @hmikosch.bsky.social:

🚨CALL FOR PAPERS🚨

Hey #EconSky!

We are now accepting submissions for Season 10 of the Applied Young Economist Webinar!

Deadline: Friday, 28 February 2025

Details below⬇️

Check out our updated working paper on “The Speed of Firm Response to Inflation”

Main Result: Firms respond to changes in headline inflation but not surprises relative to professional forecasts. Highlights distinction between “Wall Street” & “Main Street”

Link: www.nber.org/papers/w32731

People’s Understanding of Inflation - Social Economics Lab This paper studies people’s understanding of inflation — their perceived causes, consequences, trade-offs — and the policies supported to mitigate its effects. We design a new, detailed online survey ...

🚨 New data alert! Curious about how people really understand inflation—its causes, impacts & what governments should do about it? 📊 You can dive into the data from our project "People's understanding of inflation" here: socialeconomicslab.org/research/pub... Excited to see new analyses!

New #POIDWorkingPaper analysing the importance of climate-related investment using a large economy-wide survey of UK firms. By Nicholas Bloom, Philip Bunn, Paul Mizen, Prachi Srivastava, Gregory Thwaites & @iyotzov.bsky.social
poid.lse.ac.uk/PUBLI...

Check out our new working paper on non-linearities in the Phillips curve!

Link: www.bankofengland.co.uk/bank-overgro...

🎉 This month the Decision Maker Panel (DMP) celebrates its 100th survey wave 🎉

It has been an eventful 8.5 years and over 14,000 firms have responded to the survey since 2016!

We wrote a short blog summarising some key insights from the DMP over this period 👇

🚨New Working Paper

In 1958, Bill Phillips plotted a convex relationship between unemployment and wage growth. But since then, many papers have worked with a linear Phillips curve.

In a new @nberpubs.bsky.social paper, we ask: “How Curvy is the Phillips Curve?”

Link: www.nber.org/papers/w33234

14th ifo Conference on Macroeconomics and Survey Data The purpose of this conference is to discuss ongoing research on survey and micro data and its role and usage in macroeconomics.

Heading to Munich for the 14th ifo Conference on #Macro and #SurveyData! Thrilled to co-organize this fantastic event. Excited for two days filled with cutting-edge research—and maybe a Bavarian beer or two. 🍻 @apeichl.bsky.social

ifo.de/en/event/202...

Firm #climate investment: A glass half-full | Read the latest CEPR @voxeu.org column by Nicholas Bloom, Philip Bunn, Paul Mizen, @prachisrivas.bsky.social, Gregory Thwaites and @iyotzov.bsky.social
poid.lse.ac.uk/PUBLI...

*New* @voxeu.org column on UK firm climate investment using data from the Decision Maker Panel out today!

VoxEU: cepr.org/voxeu/column...

Full working paper: www.nber.org/papers/w33081

The Decision Maker Panel is a monthly survey of UK businesses. Today, we published a paper which:
1. Provides an overview of survey structure & questions
2. Evaluates data quality
3. Info on how to access microdata

Paper: bankofengland.co.uk/working-paper/…
Website: https://decisionmakerpanel.co.uk