Are Long-Run Inflation Expectations Anchored More Firmly in the Euro Area Than in the United States?

Meredith Beechey (), Benjamin K. Johannsen and Andrew Levin ()

American Economic Journal: Macroeconomics, 2011, vol. 3, issue 2, 104-29

Abstract: This paper compares the evolution of long-run inflation expectations in the euro area and the United States, using evidence from financial markets and surveys of professional forecasters. Survey data indicate that long-run inflation expectations are reasonably well anchored in both economies but reveal substantially greater dispersion across forecasters' long-horizon projections of US inflation. Analysis of daily data on inflation swaps and nominal-indexed bond spreads, which gauge compensation for expected inflation and inflation risk, also suggests that long-run inflation expectations are more firmly anchored in the euro area than in the United States. (JEL D84, E31, E37, E52, E58)

JEL-codes: D84 E31 E37 E52 E58 (search for similar items in EconPapers)
Date: 2011
Note: DOI: 10.1257/mac.3.2.104
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Citations: View citations in EconPapers (186)

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Related works:
Working Paper: Are long-run inflation expectations anchored more firmly in the Euro area than in the United States? (2008)
Working Paper: Are Long-Run Inflation Expectations Anchored More Firmly in the Euro Area than in the United States? (2007)
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