The Dynamics of European Inflation Expectations

Arbeitspapier

We investigate the relevance of the Carroll?s sticky information model of inflation expectations for four major European economies (France, Germany, Italy and the United Kingdom). Using survey data on household and expert inflation expectations we argue that the model adequately captures the dynamics of household inflation expectations. We estimate two alternative parametrizations of the sticky information model which differ in the stationarity assumptions about the underlying series. Our baseline stationary estimation suggests that the average frequency of information updating for the European households is roughly once in 18 months. The vector error-correction model implies households update information about once a year.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DIW Discussion Papers ; No. 571

Classification and Topics

• Classification: Wirtschaft ; Price Level; Inflation; Deflation ; Expectations; Speculations
• Subject: Inflation expectations ; sticky information ; inflation persistence

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Döpke, Jörg ; Dovern, Jonas ; Fritsche, Ulrich ; Slacalek, Jirka
• Event: Veröffentlichung
• (who): Deutsches Institut für Wirtschaftsforschung (DIW)
• (where): Berlin
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/18464
• Last update: 10.03.2025, 11:44 AM CET