Consumer Tendency Survey Based Inflation Expectations

Ece Oral ()

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: The expectations obtained from surveys play an important role as leading indicators for the application of the monetary policies. The ability to measure inflation expectations is an integral part of central bank policy especially for central banks that are implementing inflation-targeting regime. A forward-looking perspective is essential to the success of inflation targeting. Therefore, a central bank having primary objective of price stability are interested in inflation expectations. Qualitative data on inflation expectations obtained from surveys can be quantified into numerical indicators of the expected rates of price change. This paper presents the results of different quantification methods such as Carlson-Parkin method, balance method, regression method put into action in order to estimate Turkish consumer inflation predictions based on monthly consumer surveys. Carlson-Parkin method quantifies qualitative survey data on expectations assuming aggregate expectations are normally distributed. In order to capture non-normality, stable distributions are also considered. The quantification techniques are compared with each other as well.

Keywords: Consumers; Inflation Expectations; Survey Data; Quantification Methods (search for similar items in EconPapers)
JEL-codes: C10 C80 D84 E31 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-ara, nep-cba and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:tcb:wpaper:1308

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