Inflation Expectations

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Inflation Expectations

Peter J. N. Sinclair
Inflation Expectations Book PDF

Author : Peter J. N. Sinclair
Publisher : Routledge
Page : 402 pages
File Size : 46,8 Mb
Release : 2009-12-16
Category : Business & Economics
ISBN : 9781135179779

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Inflation Expectations by Peter J. N. Sinclair Pdf

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.

Inflation Expectations

Peter J N Sinclair
Inflation Expectations Book PDF

Author : Peter J N Sinclair
Publisher : Routledge
Page : 273 pages
File Size : 40,9 Mb
Release : 2009-12-16
Category : Business & Economics
ISBN : 9781135179786

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Inflation Expectations by Peter J N Sinclair Pdf

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, including the spread of inflation targeting and the large reduction in actual inflation that has been observed in most countries over the past decade or so.

The Behavioral Economics of Inflation Expectations

Tobias F. Rötheli
The Behavioral Economics of Inflation Expectations Book PDF

Author : Tobias F. Rötheli
Publisher : Unknown
Page : 128 pages
File Size : 49,8 Mb
Release : 2020
Category : Economics
ISBN : 1316987051

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The Behavioral Economics of Inflation Expectations by Tobias F. Rötheli Pdf

"The notion that expectations play a key role in economic decision making is a very old one. Over the past 100 years, major advances in the application of this insight in the formulation of economic models have been made in various subfields of economics. The concept of extrapolation, the idea that past observations of a series are the basis for making projections into the future, was present from the start of the modeling of dynamic economic processes"--

NBER Macroeconomics Annual 2003

Mark Gertler,Kenneth S. Rogoff
NBER Macroeconomics Annual 2003 Book PDF

Author : Mark Gertler,Kenneth S. Rogoff
Publisher : MIT Press
Page : 436 pages
File Size : 51,7 Mb
Release : 2004
Category : Business & Economics
ISBN : 0262572214

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NBER Macroeconomics Annual 2003 by Mark Gertler,Kenneth S. Rogoff Pdf

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.

Rational Expectations and Inflation

Thomas J. Sargent
Rational Expectations and Inflation Book PDF

Author : Thomas J. Sargent
Publisher : Princeton University Press
Page : 392 pages
File Size : 51,8 Mb
Release : 2013-05-05
Category : Business & Economics
ISBN : 9781400847648

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Rational Expectations and Inflation by Thomas J. Sargent Pdf

A fully expanded edition of the Nobel Prize–winning economist's classic book This collection of essays uses the lens of rational expectations theory to examine how governments anticipate and plan for inflation, and provides insight into the pioneering research for which Thomas Sargent was awarded the 2011 Nobel Prize in economics. Rational expectations theory is based on the simple premise that people will use all the information available to them in making economic decisions, yet applying the theory to macroeconomics and econometrics is technically demanding. Here, Sargent engages with practical problems in economics in a less formal, noneconometric way, demonstrating how rational expectations can satisfactorily interpret a range of historical and contemporary events. He focuses on periods of actual or threatened depreciation in the value of a nation's currency. Drawing on historical attempts to counter inflation, from the French Revolution and the aftermath of World War I to the economic policies of Margaret Thatcher and Ronald Reagan, Sargent finds that there is no purely monetary cure for inflation; rather, monetary and fiscal policies must be coordinated. This fully expanded edition of Rational Expectations and Inflation includes Sargent's 2011 Nobel lecture, "United States Then, Europe Now." It also features new articles on the macroeconomics of the French Revolution and government budget deficits.

Expectations' Anchoring and Inflation Persistence

Mr.Rudolfs Bems,Francesca G Caselli,Francesco Grigoli,Bertrand Gruss,Weicheng Lian
Expectations Anchoring and Inflation Persistence Book PDF

Author : Mr.Rudolfs Bems,Francesca G Caselli,Francesco Grigoli,Bertrand Gruss,Weicheng Lian
Publisher : International Monetary Fund
Page : 31 pages
File Size : 47,8 Mb
Release : 2018-12-11
Category : Business & Economics
ISBN : 9781484388846

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Expectations' Anchoring and Inflation Persistence by Mr.Rudolfs Bems,Francesca G Caselli,Francesco Grigoli,Bertrand Gruss,Weicheng Lian Pdf

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.

Monetary Policy Mistakes and the Evolution of Inflation Expectations

Athanasios Orphanides,John Carroll Williams
Monetary Policy Mistakes and the Evolution of Inflation Expectations Book PDF

Author : Athanasios Orphanides,John Carroll Williams
Publisher : DIANE Publishing
Page : 46 pages
File Size : 40,6 Mb
Release : 2010
Category : Business & Economics
ISBN : 9781437935615

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Monetary Policy Mistakes and the Evolution of Inflation Expectations by Athanasios Orphanides,John Carroll Williams Pdf

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.

The Great Inflation

Michael D. Bordo,Athanasios Orphanides
The Great Inflation Book PDF

Author : Michael D. Bordo,Athanasios Orphanides
Publisher : University of Chicago Press
Page : 545 pages
File Size : 47,6 Mb
Release : 2013-06-28
Category : Business & Economics
ISBN : 9780226066950

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The Great Inflation by Michael D. Bordo,Athanasios Orphanides Pdf

Controlling inflation is among the most important objectives of economic policy. By maintaining price stability, policy makers are able to reduce uncertainty, improve price-monitoring mechanisms, and facilitate more efficient planning and allocation of resources, thereby raising productivity. This volume focuses on understanding the causes of the Great Inflation of the 1970s and ’80s, which saw rising inflation in many nations, and which propelled interest rates across the developing world into the double digits. In the decades since, the immediate cause of the period’s rise in inflation has been the subject of considerable debate. Among the areas of contention are the role of monetary policy in driving inflation and the implications this had both for policy design and for evaluating the performance of those who set the policy. Here, contributors map monetary policy from the 1960s to the present, shedding light on the ways in which the lessons of the Great Inflation were absorbed and applied to today’s global and increasingly complex economic environment.

How to Improve Inflation Forecasting in Canada

Mr.Troy D Matheson
How to Improve Inflation Forecasting in Canada Book PDF

Author : Mr.Troy D Matheson
Publisher : International Monetary Fund
Page : 22 pages
File Size : 54,5 Mb
Release : 2019-09-13
Category : Business & Economics
ISBN : 9781513514970

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How to Improve Inflation Forecasting in Canada by Mr.Troy D Matheson Pdf

Against the backdrop of an ongoing review of the inflation-targeting framework, this paper examines the real-time inflation forecasts of the Bank of Canada with the aim of identifying potential areas for improvement. Not surprisingly, the results show that errors in forecasting non-core inflation (commodity prices etc.) are found to be the largest contributors to overall inflation forecast errors. Perhaps more importantly, relatively small core inflation forecast errors appear to mask large and offsetting errors related to the output gap and the policy interest rate, partly reflecting a tendency to overestimate the neutral nominal policy rate in real time. Faced with these uncertainties, the Governing Council’s gradual approach to changing its policy settings appears to have served it well.

Price Expectations in Rising Inflation

I. Visco
Price Expectations in Rising Inflation Book PDF

Author : I. Visco
Publisher : Elsevier
Page : 284 pages
File Size : 45,7 Mb
Release : 2014-06-28
Category : Business & Economics
ISBN : 9781483295831

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Price Expectations in Rising Inflation by I. Visco Pdf

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.

Gains from Anchoring Inflation Expectations: Evidence from the Taper Tantrum Shock

Mr.Rudolfs Bems,Francesca G Caselli,Mr.Francesco Grigoli,Bertrand Gruss
Gains from Anchoring Inflation Expectations Evidence from the Taper Tantrum Shock Book PDF

Author : Mr.Rudolfs Bems,Francesca G Caselli,Mr.Francesco Grigoli,Bertrand Gruss
Publisher : International Monetary Fund
Page : 13 pages
File Size : 55,7 Mb
Release : 2019-03-27
Category : Business & Economics
ISBN : 9781498306058

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Gains from Anchoring Inflation Expectations: Evidence from the Taper Tantrum Shock by Mr.Rudolfs Bems,Francesca G Caselli,Mr.Francesco Grigoli,Bertrand Gruss Pdf

Many argue that improvements in monetary policy frameworks in emerging market economies over the past few decades, have made them more resilient to external shocks. This paper exploits the May 2013 taper tantrum in the United States to study the reaction of 18 large emerging markets to an external shock, conditioning on their degree of inflation expectations' anchoring. We find that while the tapering announcement negatively affected growth prospects regardless of the level of anchoring, countries with weakly anchored inflation expectations experienced larger exchange rate pass-through to consumer prices, hence comparatively higher inflation. We conclude that efforts to improve the extent of anchoring of inflation expectations in emerging markets pay off, as they ease the trade-off that central banks face when external shocks weaken growth prospects and trigger currency depreciations.

Can Fiscal Consolidation Announcements Help Anchor Inflation Expectations?

Mr. Antonio David,Samuel Pienknagura,Juan Yepez
Can Fiscal Consolidation Announcements Help Anchor Inflation Expectations Book PDF

Author : Mr. Antonio David,Samuel Pienknagura,Juan Yepez
Publisher : International Monetary Fund
Page : 39 pages
File Size : 49,7 Mb
Release : 2024-03-15
Category : Business & Economics
ISBN : 9798400268267

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Can Fiscal Consolidation Announcements Help Anchor Inflation Expectations? by Mr. Antonio David,Samuel Pienknagura,Juan Yepez Pdf

In this paper, we use quarterly data and a novel database on fiscal policy consolidation announcements, for a sample of advanced economies and emerging markets to quantify the effects of fiscal tightening on inflation expectations. We find that fiscal consolidation announcements reduce inflation expectations over the medium-term (three and five-years ahead), but not in the short-term (one-year ahead). There is also some evidence that consolidation announcements reduce “disagreement” about expected future inflation at longer horizons. The inflation anchoring role of consolidation announcements is enhanced by the strength of a country’s fiscal and monetary frameworks, and when fiscal and monetary policy work in tandem. In addition, we find that initial conditions matter—inflation expectation’s response to consolidation announcements is larger in periods of high contemporaneous inflation. With these results in hand, we show that the effectiveness of fiscal consolidation in controlling realized inflation depends greatly on the response of inflation expectations to consolidation announcements. These results show that fiscal policy is crucial to anchor inflation expectations and a key element of a credible disinflationary process.

Inflation Expectations and Monetary Policy in India

Michael Debabrata Patra,Partha Ray
Inflation Expectations and Monetary Policy in India Book PDF

Author : Michael Debabrata Patra,Partha Ray
Publisher : International Monetary Fund
Page : 28 pages
File Size : 44,9 Mb
Release : 2010-04-01
Category : Business & Economics
ISBN : 9781451982640

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Inflation Expectations and Monetary Policy in India by Michael Debabrata Patra,Partha Ray Pdf

This paper pursues a computationally intensive approach to generate future inflation, followed by an exploration of the determinants of inflation expectations by estimating a new Keynesian type Phillips curve that takes into account country-specific characteristics, the stance of monetary and fiscal policies, marginal costs and exogenous supply shocks. The empirical results indicate that high and climbing inflation could easily seep into people’s anticipation of future inflation and linger. There is a reputational bonus for monetary policy to act against inflation now rather than going for cold turkey when societal compulsions reach a critical mass.

Mining the Gap: Extracting Firms’ Inflation Expectations From Earnings Calls

Silvia Albrizio,Allan Dizioli,Pedro Vitale Simon
Mining the Gap Extracting Firms Inflation Expectations From Earnings Calls Book PDF

Author : Silvia Albrizio,Allan Dizioli,Pedro Vitale Simon
Publisher : International Monetary Fund
Page : 46 pages
File Size : 48,6 Mb
Release : 2023-10-04
Category : Business & Economics
ISBN : 9798400253522

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Mining the Gap: Extracting Firms’ Inflation Expectations From Earnings Calls by Silvia Albrizio,Allan Dizioli,Pedro Vitale Simon Pdf

Using a novel approach involving natural language processing (NLP) algorithms, we construct a new cross-country index of firms' inflation expectations from earnings call transcripts. Our index has a high correlation with existing survey-based measures of firms' inflation expectations, it is robust to external validation tests and is built using a new method that outperforms other NLP algorithms. In an application of our index to United States, we uncover some facts related to firm's inflation expectations. We show that higher expected inflation translates into future inflation. Going into the firms level dimension of our index, we show departures from a rational framework in firms' inflation expectations and that firms' attention to the central enhances monetary policy effectiveness.

The Behavioral Economics of Inflation Expectations

Tobias F. Rötheli
The Behavioral Economics of Inflation Expectations Book PDF

Author : Tobias F. Rötheli
Publisher : Cambridge University Press
Page : 247 pages
File Size : 55,5 Mb
Release : 2020-08-13
Category : Business & Economics
ISBN : 9781108482851

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The Behavioral Economics of Inflation Expectations by Tobias F. Rötheli Pdf

A behavioral approach to modeling macroeconomic expectations.