Inflation expectations in Costa Rica

Alonso Alfaro Ureña and Carlos Monge Badilla
Authors registered in the RePEc Author Service: Alonso Alfaro-Ureña

Revista de Ciencias Económicas, 2014, vol. 32, issue 1

Abstract: The Banco Central de Costa Rica (BCCR) is currently transitioning to an Inflation Targeting (IT) regime. In such context, it is relevant for the monetary authority to characterize in the most complete way possible the inflation expectations of the population, both in the particular elements of the forecasts and in the processes by which agents take information into account for their individual predictions. This paper documents the analysis of the inflation expectations data contained in the Monthly Survey of Inflation and Exchange Rate Expectations. We test several hypotheses such as rational and adaptive expectations. The results show significant biases in those expectations, while there is also a lack of learning from past errors by the agents surveyed.

Keywords: METAS DE INFLACIÓN; ENCUESTAS; BANCA CENTRAL; EXPECTATIVAS RACIONALES; EXPECTATIVAS ADAPTATIVAS; INFLATION TARGETING; SURVEYS; CENTRAL BANKING; RATIONAL EXPECTATIONS; ADAPTATIVE EXPECTATIONS (search for similar items in EconPapers)
JEL-codes: A (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:rce:rvceco:15054

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