Inflation regimes and inflation expectations

Joseph E. Gagnon

Review, 2008, issue May, pages 229-243

Abstract: This paper examines the formation of expectations about future inflation over long horizons. A key issue that agents must confront is the possibility that the economic policy framework— especially the monetary policy regime—could change at some future date. Agents are likely to base inferences about possible future regimes on experience over many years and decades past. This aspect of expectations formation may explain why inflation premiums in long-term bond yields are higher in countries with a long history of high inflation.

Keywords: Inflation; (Finance) (search for similar items in EconPapers)
Date: 2008
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Related works:
Working Paper: Inflation regimes and inflation expectations (1997)
Working Paper: Inflation Regimes and Inflation Expectations (1997)
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