Heterogeneity of Inflation Expectations: An Analysis Using IESH Data

Ashima Goyal and Prashant Parab

A chapter in Recent Developments in Asian Economics International Symposia in Economic Theory and Econometrics, 2021, vol. 28, pp 423-437 from Emerald Group Publishing Limited

Abstract: The authors model heterogeneity of inflation expectations across Indian households using the Inflation Expectations Survey of Households data set. Using Carroll-type epidemiological models and pooled cross sectional analyses, the authors find that women, homemakers, older people and Tier 2 and 3 city dwellers tend to have higher inflation expectations compared to their counterparts. In the epidemiological model-based analysis, these very cohorts display higher speed of adjustment to news. Overall higher relative adjustment speeds point to the significance of central bank communications.

Keywords: Inflation expectations of households; epidemiological models; heterogeneity; central bank communications; inflation expectations of households; heterogeneity; epidemiological models; central bank communications; sticky information; pooled cross sections; D83; D84; E52; E58 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eme:isetez:s1571-038620210000028024

DOI: 10.1108/S1571-038620210000028024

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