Anchored inflation expectations

Arbeitspapier

We develop a theory of low-frequency movements in in ation expectations, and use it to interpret joint dynamics of in ation and in ation expectations for the United States and other countries over the post-war period. In our theory long-run in ation expectations are endogenous. They are driven by short-run in ation surprises, in a way that depends on recent forecasting performance and monetary policy. This distinguishes our theory from common explanations of low-frequency properties of in ation. The model, estimated using only in ation and short-term forecasts from professional surveys, accurately predicts observed measures of long-term in ation expectations and identifies episodes of unanchored expectations.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Texto para discussão ; No. 689

Classification and Topics

• Classification: Wirtschaft ; Business Fluctuations; Cycles ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness ; Expectations; Speculations
• Subject: Anchored expectations ; ination expectations ; survey data

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Viana de Carvalho, Carlos ; Eusepi, Stefano ; Mönch, Emanuel ; Preston, Bruce
• Event: Veröffentlichung
• (who): Pontifícia Universidade Católica do Rio de Janeiro (PUC-Rio), Departamento de Economia
• (where): Rio de Janeiro
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/249737
• Last update: 10.03.2025, 11:45 AM CET