October 10, 2025Open Access

Gas price shocks, uncertainty and price setting: evidences from Italian firms

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Natural gas price shocks lead to persistent increases in firms' current and expected prices, particularly post-COVID.
Findings reveal that gas price shocks significantly affect firms' inflation expectations, especially after Russia's invasion of Ukraine.
Using a Bayesian VAR model, the analysis identifies key drivers of pricing decisions amid inflation uncertainty.
Under high uncertainty, firms can pass cost increases to consumers, while low uncertainty leads to reduced prices.

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Implication

Observational analysis highlights how natural gas price shocks drive inflation expectations in Italy, suggesting firms face varying price setting strategies based on uncertainty.

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Giuseppe Pagano Giorgianni (2025) studied this question.

synapsesocial.com/papers/68e865117ef2f04ca37e4e0a https://doi.org/10.48550/arxiv.2510.03792

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Implication

Observational analysis highlights how natural gas price shocks drive inflation expectations in Italy, suggesting firms face varying price setting strategies based on uncertainty.

Gas price shocks, uncertainty and price setting: evidences from Italian firms

Key Points

Discussion

Implication

Cite This Study

Gas price shocks, uncertainty and price setting: evidences from Italian firms

Key Points

Discussion

Implication

Cite This Study

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