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

J. Easaw, Roberto Golinelli and Marco Malgarini ()

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

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.

JEL-codes: C33 D1 D84 E1 E31 (search for similar items in EconPapers)
Date: 2012-08
New Economics Papers: this item is included in nep-hme and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:wp842

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