How to limit the spillover from an inflation surge to inflation expectations

Arbeitspapier

We study the effects of forward looking communication in an environment of rising inflation rates on German consumers' inflation expectations using a randomized control trial. We show that information about rising inflation increases short- and long-term inflation expectations. This initial increase in expectations can be mitigated using forward looking information about inflation. Among these information treatments, professional forecasters' projections seems to reduce inflation expectations by more than policymaker's characterization of inflation as a temporary phenomenon.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IMFS Working Paper Series ; No. 168

Classification and Topics

• Classification: Wirtschaft ; Price Level; Inflation; Deflation ; Monetary Policy ; Central Banks and Their Policies ; Expectations; Speculations
• Subject: short-run and long-run inflation expectations ; inflation surge ; randomized control trial ; survey experiment ; persistent or transitory inflation shock

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dräger, Lena ; Lamla, Michael ; Pfajfar, Damjan
• Event: Veröffentlichung
• (who): Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS)
• (where): Frankfurt a. M.
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/261484
• Last update: 10.03.2025, 11:41 AM CET