Download or read book The rationality of consumers inflation expectations written by M. Forsells and published by . This book was released on 2002 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Determinants of Consumers Inflation Expectations written by Charles Bellemare and published by . This book was released on 2020 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: 'We propose and estimate a dynamic and individual model of expectations formation that links individual consumers' inflation expectations to their own lagged forecasts as well as proxies for the rational expectation forecasts. The model builds on the existing rational inattention literature and extends it in several dimensions. We explicitly model the expectations updating rule which consumers use to incorporate new information in their experience and take seriously heterogeneity in inflation expectations extensively documented in the literature. We estimate the model using data from two important new surveys -- the Federal Reserve Bank of New York's Survey of Consumer Expectations and the Bank of Canada's Canadian Survey of Consumer Expectations. We find that inflation expectations appear to correlate more strongly to measures of rational expectations forecasts in Canada than in the US, and conversely less to lagged expectations. More specifically, the median respondent assigns overall weights of roughly 75% to proxies for the rational expectation forecasts and 25% to lagged expectations in Canada, while these weights are around 50-50 for the US. We show that these differences in weights are not explained by differences in the characteristics of their stand-in consumers. Given this finding, one candidate explanation could be related to the explicit inflation target in Canada in comparison to the dual mandate in the US'--Abstract, page ii.

Download or read book NBER Macroeconomics Annual 2003 written by Mark Gertler and published by Mit Press. This book was released on 2004 with total page 432 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Download or read book Inflation Expectations written by Peter J. N. Sinclair and published by Routledge. This book was released on 2009-12-16 with total page 402 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Download or read book Consumer Expectations written by Richard Thomas Curtin and published by Cambridge University Press. This book was released on 2019-02-07 with total page 365 pages. Available in PDF, EPUB and Kindle. Book excerpt: Proposes a new comprehensive theory about how expectations are formed and how they shape the macro economy.

Download or read book Money Illusion and Rational Expectations written by Novella Maugeri and published by . This book was released on 2010 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Price Expectations in Rising Inflation written by I. Visco and published by Elsevier. This book was released on 2014-06-28 with total page 289 pages. Available in PDF, EPUB and Kindle. Book excerpt: It is claimed in this book that expectations should not necessarily be treated as unobservable variables and that there is much to be learned from survey data. A unique data set is examined, the output of surveys conducted twice a year since 1952, among informed Italian businessmen and economic experts. The predictive accuracy, rationality and determinants of inflation expectations are investigated, following an extensive analysis of measurement issues.The estimate of inflation expectations are evaluated for both wholesale and consumer price changes, comparing them with those held by respondents to other surveys for different countries and with the forecasts generated by alternative predictors of the inflation process. The expectations considered in the study are shown to be remarkably accurate, anticipating all major price changes, even if during the years of high and rising inflation which have followed the first oil crisis they appear to underestimate on a number of occasions the inflation rates actually experienced, as the alternative predictors also do.An accurate testing of the rational expectations hypothesis is conducted, rejecting it over the entire sample period but not for the period of mild, but variable inflation which preceded the first oil crises.It is shown that a mixed adaptive-regressive model, with both error-learning and return-to-normality components adapts very well to the data considered in this study and that inflation expectations are also influenced by an uncertainty component which affects the adaptive coefficient. Furthermore, regression towards normality is slowed down when industrial capacity is utilized above normal, and vice-versa. Many other issues such as the dispersion of individual answers, the problems of aggregation and measurement error are also considered and an extensive bibliography of other works where use is made of direct information on expectations, is included.

Download or read book Information Theory and Group Differences in Inflation Expectations written by R. A. Batchelor and published by . This book was released on 1986 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Do Political Attitudes Affect Consumers Inflation Expectations written by Christian Gillitzer and published by . This book was released on 2017 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: What sources of information do consumers use in forming their inflation expectations? We show for the United States and Australia that consumers report significantly lower inflation expectations when the political party they support holds executive office. This is surprising because both the United States Federal Reserve and the Reserve Bank of Australia set monetary policy to achieve price stability free from political control. Our findings cannot be explained by previously documented sources of heterogeneity in consumer inflation expectations nor models of imperfect information and rational inattention. We argue that our findings are most consistent with Gennaioli and Shleifer's (2010) model of local thinking. We discuss implications for central bank communication.

Download or read book Testing Near rationality Using Detailed Survey Data written by Michael R. Bryan and published by . This book was released on 2005 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Rational Expectations written by Graham Keith Shaw and published by . This book was released on 1984 with total page 150 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Rational Bias in Inflation Expectations written by Robert G. Murphy and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book A Note on the Rationality of Survey Inflation Expectations in the United Kingdom written by Tom Engsted and published by . This book was released on 1990 with total page 18 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book How Rational Are Inflation Expectations A Vector Autoregression Decomposition of Inflation Forecasts and Their Errors written by Timothy J. Landvogt and published by . This book was released on 2002-05-01 with total page 122 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent successive over-predictions of inflation have renewed interest in the rationality of forecasters and what causes their forecasts to deviate from rational expectations This paper examines inflation forecast data from the Livingston Survey and the ASA/NBER Survey of Professional Forecasters over the past 30 years to determine what publicly available macroeconomic information, if any, explains the persistence of forecast errors. A reduced form VAR is used to identify potential inefficiencies and then calculate the impulse response functions and variance decompositions of forecasts errors to analyze how shocks to the other endogenous variables of the VAR affect forecast error behavior. The study finds that the majority of public information is used by forecasters efficiently and therefore, supports weak form rational expectations of inflation, however, there appears to be significant inefficiency in the use of past forecast errors and the term structure of interest rates in the forecasts of both surveys. The IRF analysis also uncovers a significant change in the structure and variance of forecast errors that occurs in the early 1980's. It is hypothesized that this structural change of inflation forecast errors is related to a change in the way the Federal Reserve has conducted monetary policy since the end of the Volcker deflation in 1983.

Download or read book Disagreement about Inflation Expectations written by N. Gregory Mankiw and published by . This book was released on 2003 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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 of economic dynamics must speak to these important business cycle moments. Noting that most macroeconomic models do not endogenously generate disagreement, we show that a simple sticky-information' model broadly matches many of these facts. Moreover, the sticky-information model is consistent with other observed departures of inflation expectations from full rationality, including autocorrelated forecast errors and insufficient sensitivity to recent macroeconomic news

Download or read book The Rationality of Consumers Inflation Expextations written by M. Forsells and published by . This book was released on 2002 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Expectations Anchoring and Inflation Persistence written by Mr.Rudolfs Bems and published by International Monetary Fund. This book was released on 2018-12-11 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.