Assessing the anchoring of inflation expectations

Strohsal, Till; Winkelmann, Lars

doi:10.1016/j.jimonfin.2014.09.001

Cited by 43 publications

(33 citation statements)

References 126 publications

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“…Perspective Mehrotra and Yetman (2014), Strohsal and Winkelmann (2015) and Strohsal et al (2016) investigate the anchoring of inflation expectations from a more dynamic perspective. This literature shares the notion that long-term inflation expectations, pushed away from the inflation target by a shock, are still anchored as long as they eventually return to the inflation target.…”

Section: The Anchoring Of Inflation Expectations: a Dynamicmentioning

confidence: 99%

The Anchoring of Inflation Expectations in the Short and in the Long Run

2017

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This paper introduces structural VAR analysis as a tool for investigating the anchoring of inflation expectations. We show that U.S. consumers' inflation expectations are anchored in the long run because macro-news shocks are long-run neutral for long-term inflation expectations. The identification of structural shocks helps to explain why inflation expectations deviate from the central bank's target in the short run. Our results indicate that the recent decline of long-term inflation expectations does not result from deanchoring macro-news but can be attributed to downward adjustments of consumers' expectations about the central bank's inflation target.

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Section: The Anchoring Of Inflation Expectations: a Dynamicmentioning

confidence: 99%

The Anchoring of Inflation Expectations in the Short and in the Long Run

2017

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“…If deviations from the inflation target are small and short-lived, inflation expectations are seen as wellanchored, see e.g. Mehrotra and Yetman (2014) and Strohsal and Winkelmann (2015). Specifically, when inflation expectations are well-anchored, the expectations should not depend on observed rates of inflation but only on the inflation target.…”

Section: Introductionmentioning

confidence: 99%

The Time-Varying Degree of Inflation Expectations Anchoring

2015

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Well-anchored inflation expectations have become a key indicator for the credibility of a central bank's inflation target. Since the outbreak of the recent financial crisis, the existence and the degree of de-anchoring of U.S. inflation expectations have been under debate. This paper introduces an encompassing time-varying parameter model to analyze the changing degree of U.S. inflation expectations anchoring. We confirm that inflation expectations have been partially de-anchored during the financial crisis. Yet, our results suggest that inflation expectations have been successfully reanchored ever since.

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“…Important part of inflation expectations is that they should be well anchored. Anchoring criteria are empirical estimates of a market implied inflation target as well as the strength of the anchor that holds expectations at the target (Strohsal & Winkelmann 2012). It is important to stress on the difficulties associated with anchoring inflation expectations when policymakers attempt to maintain a high degree of employment stability relative to price stability in an environment where the central bank has imperfect information about the economy (Orphanides & Williams 2011).…”

Section: Sack 2000 Tobias and Hao 2009)mentioning

confidence: 99%

Development of Inflation Expectations in Serbia and a Comparative Analysis

Martin

2020

Journal of Central Banking Theory and Practice

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Inflation expectations are very important when it comes to monetary policy and its decisions. In countries which are applying inflation targeting, inflation expectations reflect prediction of economic agents of movement of inflation rate in mid and long term. Anchored inflation expectations and their movements within target tolerance band are pointing to effectiveness of the inflation targeting strategy. Consistent with the best international practice, after introducing the inflation targeting regime in January 2009, the National Bank of Serbia began monitoring and analysing inflation expectations of economic agents (financial sector, corporate sector, trade unions, and households). The aim of this paper is to analyse inflation expectations in Serbia, but also to give a comparative analysis of inflation expectation of other countries which are using inflation targeting and floating exchange rate, as is the case of the National Bank of Serbia.

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Assessing the anchoring of inflation expectations

Cited by 43 publications

References 126 publications

The Anchoring of Inflation Expectations in the Short and in the Long Run

The Anchoring of Inflation Expectations in the Short and in the Long Run

The Time-Varying Degree of Inflation Expectations Anchoring

Development of Inflation Expectations in Serbia and a Comparative Analysis

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