Do Households Anchor their Inflation Expectations? Theory and Evidence from a Household Survey

Easaw, Joshy ; Golinelli, Roberto ; Malgarini, Marco (2012) Do Households Anchor their Inflation Expectations? Theory and Evidence from a Household Survey. Bologna: Dipartimento di Scienze economiche, p. 58. DOI 10.6092/unibo/amsacta/4001. In: Quaderni - Working Paper DSE (842). ISSN 2282-6483.
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Abstract

The purpose of the present paper is to study how households form inflation expectations. Using a novel survey-base dataset of Italian households’ opinions of inflation we investigate two separate, but related, types of behavior: ‘inattentiveness’ and ‘anchoring’. The present analysis extends the existing literature by incorporating explicitly inflation targets and distinguishing between aggregate and disaggregate dynamics based on demographic groups. In addition, we extend the literature by considering both the short- and long-run dynamics as households update their inflation expectations while also accounting for their state-varying behavior. All these issues provide important insights into understanding actual inflation dynamics and the conduct of monetary policy.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Easaw, Joshy
Golinelli, Roberto
Malgarini, Marco
Keywords
Inflation expectations, perceived inflation, survey data, heterogeneous panels, nonlinear effects
Subjects
ISSN
2282-6483
DOI
Deposit date
04 Apr 2014 14:51
Last modified
17 Mar 2015 13:27
URI

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