Inflation Expectations and Inflation Uncertainty in the Eurozone: Evidence from Survey Data

Ivo Arnold () and Jan Lemmen ()

No CESifo Working Paper No. 1667, CESifo Working Paper Series from CESifo Group Munich

Abstract: This paper uses the European Commission’s Consumer Survey to assess whether inflation expectations have converged and whether inflation uncertainty has diminished following the introduction of the Euro in Europe. Consumers’ responses to the survey suggest that inflation expectations depend more on past national inflation rates than on the ECB’s anchor for price stability. The convergence in inflation expectations does not appear to be faster than the convergence in actual inflation rates. Regarding inflation uncertainty, the data indicate a relationship with country size, suggesting that within EMU, inflation uncertainty may increase in countries that have a smaller influence on ECB policy.

Keywords: monetary union; inflation differentials; consumer survey (search for similar items in EconPapers)
JEL-codes: D84 E31 E58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac and nep-mon
Date: 2006
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Journal Article: Inflation Expectations and Inflation Uncertainty in the Eurozone: Evidence from Survey Data (2008)
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