Anchoring of Inflation Expectations in Light of Adverse Supply Shocks
Aguilar-Argaez Ana María,
Gabriel Cuadra,
Ramírez Claudia and
Daniel Samano
Authors registered in the RePEc Author Service: Claudia Ramirez Bulos
No 2014-20, Working Papers from Banco de México
Abstract:
In order to create an environment of low and stable inflation in Mexico it has been necessary to generate a framework for the conduction of monetary policy focused on price stability along with fiscal discipline. This paper describes some structural achievements to control inflation that have been attained in Mexico. In addition, it shows empirical evidence in favor of the anchoring of inflation expectations, particularly those for the medium and long term, being recently strengthened. Considering three episodes, within the period 2004-2012, in which inflation was subject to different supply shocks, it finds that during the episode in 2012 inflation expectations showed greater stability. Results show that the response from inflation expectations to supply shocks has diminished over time, up to values that are not significantly different from zero. This suggests a strengthening of the credibility of the Bank of Mexico's commitment to price stability.
Keywords: inflation expectations; anchoring inflation expectations; cost-push shocks (search for similar items in EconPapers)
JEL-codes: E52 E58 E65 (search for similar items in EconPapers)
Date: 2014-09
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://www.banxico.org.mx/publicaciones-y-prensa/ ... -17B3DB726256%7D.pdf (application/pdf)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:bdm:wpaper:2014-20
Access Statistics for this paper
More papers in Working Papers from Banco de México Contact information at EDIRC.
Bibliographic data for series maintained by Subgerencia de desarrollo de sistemas (iec-sbgdesdesistemas-subgerente04b@banxico.org.mx).