Explore the transformative impact of AI in leadership and organisational resilience through insights from Professor David De Cremer.| The European Business Review
Price setting has become more flexible following a string of large adverse shocks. This column argues that a shift to a high-uncertainty regime incentivises firms to invest in their ability to adjust prices. Faced with higher productivity uncertainty, firms set prices more flexibly, and this gives rise to comparatively large price hikes when adverse supply shocks hit. Thus, inflation surges result not merely from large shocks alone, but as a by-product of higher uncertainty. At the same time,...| CEPR