Disagreement about Inflation Expectations

Disagreement about Inflation Expectations

Analyzing 50 years of inflation expectations data from several sources, we document substantial disagreement among both consumers and professional economists about expected future inflation. Moreover, this disagreement shows substantial variation through time, moving with inflation, the absolute value of the change in inflation, and relative price variability. We argue that a satisfactory model...

Minimal (Disagreement About) Semantics

Anchoring Expectations of Inflation

This paper studies existence and uniqueness of equilibrium in a monetary model in which fiscal policy is Ricardian. The innovation of the paper is to model agents’ expectations as endogenous probabilities which are determined in equilibrium. Since economies with a Ricardian fiscal policy typically exhibit indeterminacy of equilibrium when the monetary policy instrument is the short-term interes...

Understanding survey based inflation expectations

Survey based measures of inflation expectations are not informationally efficient yet carry important information about future inflation. This paper explores the economic significance of informational inefficiencies of survey expectations. A model selection algorithm is applied to the inflation expectations of households and professionals using a large panel of macroeconomic data. The expectati...

Estimating Inflation Expectations Using French Government Inflation-indexed Bonds

Ana del Río * We wish to thank Juan Ayuso, Fernando Restoy and participants in the seminar held at the Banco de España, especially Liliana Toledo, for helpful comments and suggestions. Abstract Inflation-indexed bonds are fixed-income securities whose nominal cash flows are adjusted to an inflation index. In countries where these securities exist, inflation expectations are sometimes estimated ...