Medium- vs. short-term consumer inflation expectations: evidence from a new euro area survey

Ewa Stanisławska and Maritta Paloviita ()
Additional contact information
Ewa Stanisławska: Narodowy Bank Polski

No 338, NBP Working Papers from Narodowy Bank Polski

Abstract: Using the ECB Consumer Expectations Survey, this paper investigates how consumers revise medium-term inflation expectations. We provide robust evidence of their adjustment to the current economic developments. In particular, consumers adjust medium-term inflation views in response to changes in short-term inflation expectations and, to a lesser degree, to changes in inflation perceptions. We find that the strong adverse Covid-19 pandemic shock contributed to an increase in consumer inflation expectations. We show that consumers who declare high trust in the ECB adjust their medium-term inflation expectations to a lesser degree than consumers with low trust. Our results increase understanding of expectations formation, which is an important issue for medium-term oriented monetary policy.

Keywords: Inflation expectations; consumer survey; micro-data (search for similar items in EconPapers)
JEL-codes: D12 D84 E31 E58 (search for similar items in EconPapers)
Pages: 42
Date: 2021
New Economics Papers: this item is included in nep-eec, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://static.nbp.pl/publikacje/materialy-i-studia/338_en.pdf (application/pdf)

Related works:
Working Paper: Medium- vs. short-term consumer inflation expectations: Evidence from a new euro area survey (2021)
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:nbp:nbpmis:338

Access Statistics for this paper

More papers in NBP Working Papers from Narodowy Bank Polski Contact information at EDIRC.
Bibliographic data for series maintained by Jakub Growiec ().