Marco Bottone, Cristina Conflitti, Marianna Riggi, Alex Tagliabracci, 30 June 2021

How has the Covid-19 shock affected firms’ pricing choices and inflation expectations? Using a rich survey of Italian firms, this column documents that planned price changes and inflation expectations appear to have been driven by the expected duration of the downturn and by the strength of competitive pressures. It finds no effects of liquidity and financial conditions, which were major drivers of corporate pricing policies during the Great Recession and the sovereign debt crisis, on pricing strategies during the pandemic.

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