Is the Anchoring of Consumers' Inflation Expectations Shaped by Inflational Experience?

Arbeitspapier

In this paper, we explore the degree of anchoring of consumers’ individual long-run inflation expectations utilizing the University of Michigan Survey of Consumer’s rotating panel micro-structure. Our results indicate that long-run inflation expectations became more anchored over the last decades, as the degree of co-movement between short- and long-run expectations fell significantly. While we observe that the anchoring of expectations increases for all age and birth cohorts, it seems that older cohorts, who experienced the high inflation period of the 1970s, remain less anchored in their long-run inflation expectations as compared to the young cohorts. Older cohorts show a higher volatility in their degree of anchoring and react more to adverse news shocks. This alludes to potentially long-lasting costs of high inflation spells.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 7042

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Price Level; Inflation; Deflation ; Monetary Policy ; Central Banks and Their Policies ; Expectations; Speculations ; Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
• Thema: anchoring ; inflation expectations ; micro data ; birth cohort effects ; news

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Dräger, Lena ; Lamla, Michael
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and ifo Institute (CESifo)
• (wo): Munich
• (wann): 2018

Weitere Informationen

• Handle: http://hdl.handle.net/10419/180304
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ