Gasoline price changes and consumer inflation expectations: Experimental evidence
Felix Aidala,
Olivier Armantier,
Gizem Kosar,
Jason Somerville,
Giorgio Topa and
Wilbert van der Klaauw
Journal of Economic Behavior & Organization, 2024, vol. 220, issue C, 66-80
Abstract:
Using an experimental approach, we show that inflation expectations respond to gasoline price fluctuations. The effect, however, is small compared to other goods (food, durable goods) and not disproportionately large relative to the expenditure share of gasoline in households' basket. The effect also weakens with the forecast horizons and displays substantial asymmetry: inflation expectations respond significantly more to positive than negative gasoline price shocks. A counterfactual exercise suggests that while the sharp rise in gasoline prices that followed the Russian invasion of Ukraine contributed substantially to short-term inflation expectations dynamics, the subsequent decline in gasoline prices did not.
Keywords: Survey experiment; Inflation expectations; Gasoline prices; Household survey (search for similar items in EconPapers)
JEL-codes: C93 D84 E31 E37 E52 Q43 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268124000337
Full text for ScienceDirect subscribers only
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:eee:jeborg:v:220:y:2024:i:c:p:66-80
DOI: 10.1016/j.jebo.2024.01.027
Access Statistics for this article
Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.
More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu (repec@elsevier.com).