DETERMINANTS OF PRICE EXPECTATIONS OF MANAGERS AND ENTREPRENEURS IN THE SERVICES SECTOR IN THE REPUBLIC OF NORTH MACEDONIA

: In this paper, we investigate the determinants of price expectations of managers and entrepreneurs in the services sector in the Republic of North Macedonia. The services sector is an important sector for the domestic economy, and inflation has a direct influence on the economic stability. In the last few months, we have witnessed significant price increases all over the world, and similarly, prices have also been rising significantly in the Republic of North Macedonia in recent months. In this paper, we try to investigate the drivers of price expectations that managers and entrepreneurs in firms in the services sector in North Macedonia have. By constructing an OLS regression model, we find that the price level from the previous month, demand expec tations for the next three months, employment expectations for the next three months, and employment in the past three months are statistically significant, and have the expected positive sign, meaning that they are positively associated with the expectations for the future price level. However, after implementing the HAC Newey-West correction, we find that only the variable employment expectations for the next three months remains statistically significant.