Tim Willems and Rick van der Ploeg Since the post-Covid rise in inflation has been accompanied by strong wage growth, interactions between wage and price-setters, each wishing to attain a certain markup, have regained prominence. In our recently published Staff Working Paper, we ask how monetary policy should be conducted amid, what has been referred … Continue reading Markup matters: monetary policy works through aspirations
Mark-ups
Sophie Piton, Ivan Yotzov and Ed Manuel How have profits behaved in this context of sustained level of inflation? In part, the answer depends on how ‘profits’ are defined. Some broad measures suggest increasing profits, but conflate market and non-market sector dynamics and omit important corporate costs. We construct an alternative measure of corporate profits … Continue reading Profits in a time of inflation: some insights from recent and past energy shocks in the UK