Briefing
Building A Pipeline Between Producer and Consumer Prices
O'Trakoun, John; Ramachandran, David (2022-09)
Do rapidly rising producer prices signal pain ahead for consumers? We take a fresh look at the relationship between producer and consumer price indexes. We document a correlation between upstream producer prices and the Fed's preferred measure of consumer price inflation (the personal consumption expenditure price index). Using a statistical model, we find that that levels and growth rates of producer prices have a statistically significant impact on consumer price inflation. Gaps between the two price indexes tend to normalize over time, which, given recent data, suggests that upward ...
Richmond Fed Economic Brief , Volume 22 , Issue 38

Report
Distribution margins, imported inputs, and the sensitivity of the CPI to exchange rates
Campa, Jose Manuel; Goldberg, Linda S. (2006-04-01)
Border prices of traded goods are highly sensitive to exchange rates; however, the consumer price index (CPI) and the retail prices of goods that make up the CPI are more stable. This paper decomposes the sources of this price stability for twenty-one OECD (Organisation for Economic Co-operation and Development) countries, focusing on the important role of distribution margins and imported inputs in transmitting exchange rate fluctuations into consumption prices. We provide rich cross-country and cross-industry details on distribution margins and their sensitivity to exchange rates, imported ...
Staff Reports , Paper 247

Report
Pass-through of exchange rates to consumption prices: what has changed and why
Campa, Jose Manuel; Goldberg, Linda S. (2006-09-01)
In this paper, we use cross-country and time-series evidence to argue that retail price sensitivity to exchange rates may have increased over the past decade. This finding applies to traded goods as well as to non-traded goods. We highlight three reasons for the change in pass-through into the retail prices of goods. First, pass-through may have declined at the level of import prices, but the evidence is mixed over types of goods and countries. Second, there has been a large expansion of imported input use across sectors, meaning that the costs of imported goods as well as home-tradable goods ...
Staff Reports , Paper 261

Journal Article
Consumer Price Inflation and Rising Rents in the West
Rappaport, Jordan; Redmond, Michael (2016-12-19)
Rising home rents in four western metros have increasingly boosted consumer price inflation.
Macro Bulletin

Journal Article
The Phillips Curve and the Missing Disinflation from the Great Recession
Van Zandweghe, Willem (2019-04)
Although inflation has run somewhat below the Federal Reserve?s 2 percent objective during the ongoing economic expansion, the ?missing disinflation? during the Great Recession presents a much bigger puzzle for economists. During the recession, unemployment rose sharply, but core inflation declined only moderately. As a result, some economists have questioned whether the traditional inverse relationship between inflation and unemployment?known as the Phillips curve?still holds. {{p}} Willem Van Zandweghe estimates a Phillips curve model consistent with microdata on consumer prices. The model ...
Economic Review , Issue Q II , Pages 5-31