How Cost Shocks Drive Sellers’ Inflation
Supply shocks are widely recognized as a driver of the recent inflation bout. But the role of firms' pricing strategies in propagating input cost shocks remains contested. In this paper, PERI researcher Isabella Weber, along with Evan Wasner, Markus Lang, Benjamin Braun, and Jens van ‘t Klooster, examines 138,962 corporate earnings call transcripts of 4,823 stock-market listed U.S. corporations from the period 2007-Q1 to 2022-Q2 to analyze corporate executive price-setting strategies. They find that large input price shocks, along with broader supply constraints, correlate with executives’ positive assessments regarding price mark-ups and enhanced profit opportunities.
Is High Inflation an Exchange Rate Phenomenon?
Drawing on global data between 1961 - 2023, PERI researcher Hasan Cömert, Tural Yusifzada, and Kagan Parmaksiz examine the extent to which nominal exchange rate depreciations are strong predictors of high inflation episodes. They find that, on its own, exchange rate depreciations can explain between 63 – 77 percent of high inflation episodes across the range of economies and time periods. Food and energy supply shocks are the other main contributors. These results highlight the critical role of exchange rate dynamics, along with supply shocks, in explaining high inflation episodes.
Sex-Selective Abortion and the Collapse of the Soviet Union
PERI researcher Lawrence King, Raymond Caraher, and Shih-Yen Pan examine the causal effect of the Soviet Union’s collapse on sex-selection abortions in Post-Soviet countries. Their findings indicate that the collapse of the Soviet Union explains 64 percent of the approximately 192,000 missing girls in the Post-Soviet states in the 1990s. The conventional theory of pre-natal sex selection involves the introduction of modern sex-determination technology into a cultural environment that values sons over daughters. Their findings suggest that economic and political shocks can also be key drivers behind increases in sex-selective abortions.
How to Eliminate Plastic Water Bottles in the U.S.
As of 2018, U.S. residents purchased more than 70 billion plastic water bottles. Virtually all these bottles are fossil fuel-based products, and 86 percent are used only once. Such fossil fuel-based single-use plastic bottles inflict a range of severe negative impacts on the environment and human health. Emily Diaz-Loar examines six possible alternatives: recycling, bioplastics, paperboard cartons, glass, aluminum, and stainless steel. Diaz-Loar shows that in terms of both environmental impacts and production costs, the most viable substitutes are reusable bottles made from either aluminum or stainless steel.
