A New Approach to Assess Inflation Expectations Anchoring Using Strategic Surveys

Olivier Armantier, Argia Sbordone, Giorgio Topa, Wilbert van der Klaauw and John Williams

No 1007, Staff Reports from Federal Reserve Bank of New York

Abstract: We propose a new approach to assessing the anchoring of inflation expectations using “strategic surveys.” Namely, we measure households’ revisions in long-run inflation expectations after they are presented with different economic scenarios. A key advantage of this approach is that it provides a causal interpretation in terms of how inflation events affect long-run inflation expectations. We implement the method in the summer of 2019 and the spring-summer of 2021 when the anchoring of long-run inflation expectations was in question. We find that the risk of unanchoring of expectations was reasonably low in both periods, and that long-run inflation expectations were essentially as well anchored in August 2021 as in July 2019, before the COVID-19 pandemic.

Keywords: inflation; expectations; anchoring; strategic surveys (search for similar items in EconPapers)
JEL-codes: D12 D84 E31 E52 (search for similar items in EconPapers)
Pages: 42
Date: 2022-02-01
New Economics Papers: this item is included in nep-ban, nep-cba, nep-cwa, nep-mac and nep-mon
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Citations: View citations in EconPapers (16)

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