Average Inflation Targeting and Household Expectations

Raphael Schoenle, Yuriy Gorodnichenko and Edward Knotek
Authors registered in the RePEc Author Service: Olivier Coibion

No 15307, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Using a daily survey of U.S. households, we study how the Federal Reserve’s announcement of its new strategy of average inflation targeting affected households’ expectations. Starting with the day of the announcement, there is a very small uptick in the minority of households reporting that they had heard news about monetary policy relative to prior to the announcement, but this effect fades within a few days. Those hearing news about the announcement do not seem to have understood the announcement: they are no more likely to correctly identify the Fed’s new strategy than others, nor are their expectations different. When we provide randomly selected households with pertinent information about average inflation targeting, their expectations still do not change in a different way than when households are provided with information about traditional inflation targeting.

Keywords: Inflation targeting; Inflation expectations; Surveys; Communication; Randomized controlled trial (search for similar items in EconPapers)
JEL-codes: E3 E4 E5 (search for similar items in EconPapers)
Date: 2020-09
New Economics Papers: this item is included in nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (37)

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Related works:
Journal Article: Average Inflation Targeting and Household Expectations (2023)
Working Paper: Average Inflation Targeting and Household Expectations (2021)
Working Paper: Average Inflation Targeting and Household Expectations (2020)
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