U S Inflation Expectations During The Pandemic

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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.

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.

The Expected Perceived And Realized Inflation Of U S Households Before And During The Covid19 Pandemic

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Author : Michael Weber
language : en
Publisher:
Release Date : 2022

The Expected Perceived And Realized Inflation Of U S Households Before And During The Covid19 Pandemic written by Michael Weber and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022 with categories.

As the pandemic spread across the U.S., disagreement among U.S. households about inflation expectations surged along with the mean perceived and expected level of inflation. Simultaneously, the inflation experienced by households became more dispersed. Using matched micro data on spending of households and their macroeconomic expectations, we study the link between the inflation experienced by households in their daily shopping and their perceived and expected levels of inflation both before and during the pandemic. In normal times, realized inflation barely differs across observable dimensions but low income, low education, and Black households experienced a larger increase in realized inflation than other households did. Dispersion in realized and perceived inflation explains a large share of the rise in dispersion in inflation expectations.

The Expected Perceived And Realized Inflation Of U S Households Before And During The Covid19 Pandemic

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Author : Michael Weber (Professor of finance)
language : en
Publisher:
Release Date : 2022

The Expected Perceived And Realized Inflation Of U S Households Before And During The Covid19 Pandemic written by Michael Weber (Professor of finance) and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022 with COVID-19 Pandemic, 2020- categories.

As the pandemic spread across the U.S., disagreement among U.S. households about inflation expectations surged along with the mean perceived and expected level of inflation. Simultaneously, the inflation experienced by households became more dispersed. Using matched micro data on spending of households and their macroeconomic expectations, we study the link between the inflation experienced by households in their daily shopping and their perceived and expected levels of inflation both before and during the pandemic. In normal times, realized inflation barely differs across observable dimensions but low income, low education, and Black households experienced a larger increase in realized inflation than other households did. Dispersion in realized and perceived inflation explains a large share of the rise in dispersion in inflation expectations.

Has The Asymmetric Effect Of Oil Price Change In Inflation Expectations Been Impacted By The Covid 19 Outbreak A Comparison Between The United States And China

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Author : Qing Nie
language : en
Publisher:
Release Date : 2023

Has The Asymmetric Effect Of Oil Price Change In Inflation Expectations Been Impacted By The Covid 19 Outbreak A Comparison Between The United States And China written by Qing Nie and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023 with categories.

Economists and policymakers believe that households' and firms' expectations of future inflation are key determinants of actual inflation. This paper applies the ARDL model and nonlinear ARDL model to long-term inflation-targeting policy mechanisms in the United States and China to assess the impact of oil price dynamics and asymmetries on inflation expectations, as well as the difference of this impact before and after the COVID-19 pandemic. In order to show the significant role of the COVID-19 outbreak, this paper includes the data from 2010 to 2021 and takes the pandemic period as a structural break. Taking oil price changes as a variable of interest, and introducing some other significant variables, we find that during the pandemic, the positive impact of oil price shock on U.S. inflation expectations has enhanced, whereas the positive impact on Chinese inflation expectations has weakened. There is also sufficient evidence of the existence of the asymmetric effects of oil price changes on inflation expectations in both countries, but the positive oil price change in the United States has always played a larger role than the negative oil price shock. In China, the impact of positive oil price shock was greater than that of negative oil prices before the epidemic and the effect of negative oil price shocks has increased significantly in the COVID-19 regime.

Understanding Consumer Inflation Expectations During The Covid 19 Pandemic

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Author : Gunda-Alexandra Detmers
language : en
Publisher:
Release Date : 2022

Understanding Consumer Inflation Expectations During The Covid 19 Pandemic written by Gunda-Alexandra Detmers and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022 with categories.

Inflation Expectations In The U S Linking Markets Households And Businesses

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Author : Peter D. Williams
language : en
Publisher: INTERNATIONAL MONETARY FUND
Release Date : 2020-11-13

Inflation Expectations In The U S Linking Markets Households And Businesses written by Peter D. Williams 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 2020-11-13 with Business & Economics categories.

Inflation has been below the Federal Reserve’s target for much of the past 20 years, creating worries that inflation may be deanchoring from the FOMC’s target. This paper uses a factor model that incorporates information from professional forecasters, household and business surveys, and the market for Treasury inflation protected securities (TIPS) to estimate long-run inflation expectations. These have fallen notably in the past few years (to roughly 1.9 percent for CPI inflation, well below the FOMC’s target). It appears that, even before the covid recession, the private sector viewed the economy as likely to suffer from persistent headwinds to inflation.

Inflation Expectations Inflation Target Credibility And The Covid 19 Pandemic

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Author : Winnie Coleman
language : en
Publisher:
Release Date : 2021

Inflation Expectations Inflation Target Credibility And The Covid 19 Pandemic written by Winnie Coleman and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.

Understanding U S Inflation During The Covid Era

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Author : Laurence M. Ball
language : en
Publisher: INTERNATIONAL MONETARY FUND
Release Date : 2022-10-28

Understanding U S Inflation During The Covid Era written by Laurence M. Ball 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 2022-10-28 with Business & Economics categories.

This paper analyzes the dramatic rise in U.S. inflation since 2020, which we decompose into a rise in core inflation as measured by the weighted median inflation rate and deviations of headline inflation from core. We explain the rise in core with two factors, the tightening of the labor market as captured by the ratio of job vacancies to unemployment, and the pass-through into core from past shocks to headline inflation. The headline shocks themselves are explained largely by increases in energy prices and by supply chain problems as captured by backlogs of orders for goods and services. Looking forward, we simulate the future path of inflation for alternative paths of the unemployment rate, focusing on the projections of Federal Reserve policymakers in which unemployment rises only modestly to 4.4 percent. We find that this unemployment path returns inflation to near the Fed’s target only under optimistic assumptions about both inflation expectations and the Beveridge curve relating the unemployment and vacancy rates. Under less benign assumptions about these factors, the inflation rate remains well above target unless unemployment rises by more than the Fed projects.

Anchoring Of Consumers Long Term Euro Area Inflation Expectations During The Pandemic

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Author : Gabriele Galati
language : en
Publisher:
Release Date : 2021

Anchoring Of Consumers Long Term Euro Area Inflation Expectations During The Pandemic written by Gabriele Galati and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.