Firm-Level Input Price Changes and Their Effects: A Deep Learning Approach

Authors

Sudheer Chava, Wendi Du, Indrajit Mitra, Agam Shah, Linghang Zeng

Posted to EERN: December 16, 2025

FEDERAL RESERVE RESEARCH: Atlanta

We develop firm-level measures of input and output price changes using textual analysis of earnings calls. We establish five facts: (1) Input prices increase (decrease) at the median firm once every seven (30) months. (2) Input price changes contain an equal blend of aggregate and firm-specific components. (3) A firm’s stock price experiences a –1.15 percent return when our input price change measure is in the top tercile of price increases. (4) Our input price change measure predicts future changes in the cost of goods sold. (5) Firms pass through input price changes to output prices in the same quarter with a magnitude of 0.7.

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