Arbeitspapier
European inflation expectations dynamics
This paper investigates the relevance of the sticky information model of Mankiw and Reis (2002) and Carroll (2003) for four major European economies (France, Germany, Italy and the United Kingdom). As opposed to the benchmark rational expectation models, households in the sticky information environment update their expectations sporadically rather than instantaneously owing to the costs of acquiring and processing information. We estimate two alternative parametrizations of the sticky information model which differ in the stationarity assumptions about the underlying series. Using survey data on households? and experts? inflation expectations, we find that the model adequately captures the dynamics of household inflation expectations. Both parametrizations imply comparable speeds of information updating for the European households as was previously found in the US, on average roughly once a year.
- Language
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Englisch
- Bibliographic citation
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Series: Discussion Paper Series 1 ; No. 2005,37
- Classification
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Wirtschaft
Price Level; Inflation; Deflation
- Subject
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Inflation
expectations
sticky information
inflation persistence
Inflationserwartung
Schätzung
Deutschland
Frankreich
Italien
Großbritannien
sticky information
- Event
-
Geistige Schöpfung
- (who)
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Slacalek, Jirka
Fritsche, Ulrich
Dovern, Jonas
Döpke, Jörg
- Event
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Veröffentlichung
- (who)
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Deutsche Bundesbank
- (where)
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Frankfurt a. M.
- (when)
-
2005
- Handle
- Last update
-
20.09.2024, 8:22 AM CEST
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Slacalek, Jirka
- Fritsche, Ulrich
- Dovern, Jonas
- Döpke, Jörg
- Deutsche Bundesbank
Time of origin
- 2005