Do Household Expectations Help Predict Inflation
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Do Household Expectations Help Predict Inflation
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Author : Mr. Luis Brandão-Marques
language : en
Publisher: International Monetary Fund
Release Date : 2023-10-27
Do Household Expectations Help Predict Inflation written by Mr. Luis Brandão-Marques and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-10-27 with Business & Economics categories.
We examine whether changes in the distribution of household inflation expectations contain information on future inflation. We first discuss recent shifts in micro data from the US, UK, Germany, and Canada. We then zoom in on the US to explore econometrically whether distributional characteristics help predict future inflation. We find that the shape of the distribution of household expectations does indeed help predict one-year-ahead CPI inflation. Variance and skewness of household expectations’ distributions add predictive power beyond and above the median, especially in periods of high inflation. Remarkably, qualitatively, these results hold when including market-based measures and moments of the distribution of professional forecasts.
Inflation Expectations
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Author : Peter J. N. Sinclair
language : en
Publisher: Routledge
Release Date : 2009-12-16
Inflation Expectations written by Peter J. N. Sinclair and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009-12-16 with Business & Economics categories.
Inflation is regarded by the many as a menace that damages business and can only make life worse for households. Keeping it low depends critically on ensuring that firms and workers expect it to be low. So expectations of inflation are a key influence on national economic welfare. This collection pulls together a galaxy of world experts (including Roy Batchelor, Richard Curtin and Staffan Linden) on inflation expectations to debate different aspects of the issues involved. The main focus of the volume is on likely inflation developments. A number of factors have led practitioners and academic observers of monetary policy to place increasing emphasis recently on inflation expectations. One is the spread of inflation targeting, invented in New Zealand over 15 years ago, but now encompassing many important economies including Brazil, Canada, Israel and Great Britain. Even more significantly, the European Central Bank, the Bank of Japan and the United States Federal Bank are the leading members of another group of monetary institutions all considering or implementing moves in the same direction. A second is the large reduction in actual inflation that has been observed in most countries over the past decade or so. These considerations underscore the critical – and largely underrecognized - importance of inflation expectations. They emphasize the importance of the issues, and the great need for a volume that offers a clear, systematic treatment of them. This book, under the steely editorship of Peter Sinclair, should prove very important for policy makers and monetary economists alike.
Do Actions Speak Louder Than Words
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Author : Atsushi Inoue
language : en
Publisher:
Release Date : 2006
Do Actions Speak Louder Than Words written by Atsushi Inoue and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with Consumption (Economics) categories.
Nber Macroeconomics Annual 2003
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Author : Mark Gertler
language : en
Publisher: MIT Press
Release Date : 2004
Nber Macroeconomics Annual 2003 written by Mark Gertler and has been published by MIT Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with Business & Economics categories.
The NBER Macroeconomics Annual presents pioneering work in macroeconomics by leading academic researchers to an audience of public policymakers and the academic community. Each commissioned paper is followed by comments and discussion. This year's edition provides a mix of cutting-edge research and policy analysis on such topics as productivity and information technology, the increase in wealth inequality, behavioral economics, and inflation.
Expectations Anchoring And Inflation Persistence
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Author : Mr.Rudolfs Bems
language : en
Publisher: International Monetary Fund
Release Date : 2018-12-11
Expectations Anchoring And Inflation Persistence written by Mr.Rudolfs Bems and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-12-11 with Business & Economics categories.
Understanding the sources of inflation persistence is crucial for monetary policy. This paper provides an empirical assessment of the influence of inflation expectations' anchoring on the persistence of inflation. We construct a novel index of inflation expectations' anchoring using survey-based inflation forecasts for 45 economies starting in 1989. We then study the response of consumer prices to terms-of-trade shocks for countries with flexible exchange rates. We find that these shocks have a significant and persistent effect on consumer price inflation when expectations are poorly anchored. By contrast, inflation reacts by less and returns quickly to its pre-shock level when expectations are strongly anchored.
Information Rigidities
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Author : Jonas Dovern
language : en
Publisher: International Monetary Fund
Release Date : 2014-02-12
Information Rigidities written by Jonas Dovern and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-02-12 with Business & Economics categories.
We study forecasts for real GDP growth using a large panel of individual forecasts from 36 advanced and emerging economies during 1989–2010. We show that the degree of information rigidity in average forecasts is substantially higher than that in individual forecasts. Individual level forecasts are updated quite frequently, a behavior more in line “noisy” information models (Woodford, 2002; Sims, 2003) than with the assumptions of the sticky information model (Mankiw and Reis, 2002). While there are cross-country variations in information rigidity, there is no systematic difference between advanced and emerging economies.
Monetary Policy Mistakes And The Evolution Of Inflation Expectations
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Author : Athanasios Orphanides
language : en
Publisher: DIANE Publishing
Release Date : 2010
Monetary Policy Mistakes And The Evolution Of Inflation Expectations written by Athanasios Orphanides and has been published by DIANE Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with Business & Economics categories.
What monetary policy framework, if adopted by the Federal Reserve, would have avoided the Great Inflation of the 1960s and 1970s? The authors use counterfactual simulations of an estimated model of the U.S. economy to evaluate alternative monetary policy strategies. The authors document that policymakers at the time both had an overly optimistic view of the natural rate of unemployment and put a high priority on achieving full employment. They show that in the presence of realistic informational imperfections and with an emphasis on stabilizing economic activity, an optimal control approach would have failed to keep inflation expectations well anchored, resulting in highly volatile inflation during the 1970s. Charts and tables.
Consumer Expectations
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Author : Richard Thomas Curtin
language : en
Publisher: Cambridge University Press
Release Date : 2019-02-07
Consumer Expectations written by Richard Thomas Curtin and has been published by Cambridge University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-02-07 with Business & Economics categories.
Proposes a new comprehensive theory about how expectations are formed and how they shape the macro economy.
U S Inflation Expectations During The Pandemic
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Author : Euihyun Bae
language : en
Publisher: International Monetary Fund
Release Date : 2024-02-09
U S Inflation Expectations During The Pandemic written by Euihyun Bae and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2024-02-09 with Business & Economics categories.
This paper studies how and why inflation expectations have changed since the emergence of Covid-19. Using micro-level data from the University of Michigan Survey of Consumers, we show that the distribution of consumer expectations at one-year and five-ten year horizons has widened since the surge of inflation during 2021, along with the mean. Persistently high and heterogeneous expectations of consumers with less education and lower income are mainly responsible. A simple model of adaptive learning is able to mimic the change in inflation expectations over time for different demographic groups. The inflation expectations of low income and female consumers are consistent with using less complex forecasting models and are more backward-looking. A medium-scale DSGE model with adaptive learning, estimated during 1965-2022, has a time-varying solution that produces lower forecast errors for inflation than a variant with rational expectations. The estimated model interprets the surge of inflation in 2021 mainly as the result of a price markup shock, which is more persistent and requires a larger and more persistent monetary policy response than under rational expectations.
Reducing Inflation
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Author : Christina D. Romer
language : en
Publisher: University of Chicago Press
Release Date : 2007-12-01
Reducing Inflation written by Christina D. Romer and has been published by University of Chicago Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007-12-01 with Business & Economics categories.
While there is ample evidence that high inflation is harmful, little is known about how best to reduce inflation or how far it should be reduced. In this volume, sixteen distinguished economists analyze the appropriateness of low inflation as a goal for monetary policy and discuss possible strategies for reducing inflation. Section I discusses the consequences of inflation. These papers analyze inflation's impact on the tax system, labor market flexibility, equilibrium unemployment, and the public's sense of well-being. Section II considers the obstacles facing central bankers in achieving low inflation. These papers study the precision of estimates of equilibrium unemployment, the sources of the high inflation of the 1970s, and the use of non-traditional indicators in policy formation. The papers in section III consider how institutions can be designed to promote successful monetary policy, and the importance of institutions to the performance of policy in the United States, Germany, and other countries. This timely volume should be read by anyone who studies or conducts monetary policy.