Prof. Schoenle’s research was featured at the NBER Monetary Economics Meetings in Cambridge, on November 1st. His paper “Inflation Dynamics During the Financial Crisis” was one of six papers on the program. The discussant was Yuriy Gorodnichenko (UC Berkeley).

His paper uses data from the Bureau of Labor Statistics to show that firm financial conditions – such as firms’ total assets or interest expenses – may significantly influence the pricing response of firms following macroeconomic shocks like the 2007-2009 financial crisis. The evidence indicates that during the height of the crisis in late 2008, firms with “weak” balance sheets increased prices significantly relative to firms with “strong” balance sheets which lowered prices. The paper also presents a model to argue that the interaction of firm financial conditions and price-setting behavior may have important policy implications, for example for how the Board of Governors should set interest rates.

The paper can be found at, and the full program can be found at


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