EFFECTS OF INFLATION EXPECTATIONS ON INFLATION

Richhild Moessner

National Institute Economic Review, 2024, vol. 270, 55-63

Abstract: We study the effects of professionals’ survey-based inflation expectations on inflation for a large number of 36 economies, using dynamic cross-country panel estimation of New-Keynesian Phillips curves. We find that inflation expectations have a significantly positive effect on inflation. We also find that the effect of inflation expectations on inflation is significantly larger when inflation is higher. This suggests that second-round effects via the effects of higher inflation expectations on inflation are more relevant in a high-inflation environment.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:cup:nierev:v:270:y:2024:i::p:55-63_4

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