Inflation perceptions and expectations in Sweden - are media reports the 'missing link'?

Lena Draeger
Authors registered in the RePEc Author Service: Lena Dräger

No 11-273, KOF Working papers from KOF Swiss Economic Institute, ETH Zurich

Abstract: Using quantitative survey data from the Swedish Consumer Tendency Survey as well as a unique data set on media reports about inflation, we analyze the formation process of inflation perceptions and expectations as well as interrelations between the variables. Throughout the analysis, the role of media reports about inflation is emphasized and results for the low inflation period January 1998 to December 2007 are compared to those including the high inflation year 2008. Rejecting rationality, we find that perceptions, but not expectations, are affected asymmetrically by news, where media effects are generally stronger in times of high and volatile inflation. For the low inflation sample period, inflation expectations are more affected by shocks to perceptions than vice versa, but Granger causality runs from expectations to per- ceptions. Including more volatile inflation, we find more feed-back between the variables and a strong media effect especially on perceptions.

Keywords: Inflation expectations; Inflation perceptions; Media reports (search for similar items in EconPapers)
Pages: 51 pages
Date: 2011-02
New Economics Papers: this item is included in nep-cba, nep-cul, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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http://dx.doi.org/10.3929/ethz-a-006341668 (application/pdf)

Related works:
Journal Article: Inflation perceptions and expectations in Sweden – Are media reports the missing link? (2015)
Working Paper: Inflation Perceptions and Expectations in Sweden - Are Media Reports the `Missing Link'? (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:kof:wpskof:11-273

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