How to limit the spillover from an inflation surge to inflation expectations

Lena Dräger, Michael Lamla and Damjan Pfajfar

No 168, IMFS Working Paper Series from Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS)

Abstract: We study the effects of forward looking communication in an environment of rising inflation rates on German consumers' inflation expectations using a randomized control trial. We show that information about rising inflation increases short- and long-term inflation expectations. This initial increase in expectations can be mitigated using forward looking information about inflation. Among these information treatments, professional forecasters' projections seems to reduce inflation expectations by more than policymaker's characterization of inflation as a temporary phenomenon.

Keywords: short-run and long-run inflation expectations; inflation surge; randomized control trial; survey experiment; persistent or transitory inflation shock (search for similar items in EconPapers)
JEL-codes: D84 E31 E52 E58 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-cba, nep-eec, nep-exp and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: How to limit the spillover from an inflation surge to inflation expectations? (2024)
Working Paper: How to Limit the Spillover from an Inflation Surge to Inflation Expectations? (2023)
Working Paper: How to Limit the Spillover from an Inflation Surge to Inflation Expectations? (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:imfswp:168

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