Average Inflation Targeting and Household Expectations
Olivier Coibion,
Yuriy Gorodnichenko,
Edward Knotek and
Raphael Schoenle
Journal of Political Economy Macroeconomics, 2023, vol. 1, issue 2, 403 - 446
Abstract:
Using a daily survey of US households, we study how the Federal Reserve’s announcement of its new strategy of average inflation targeting affected households’ expectations. Starting with the day of the announcement, there is a small uptick in the minority of households reporting that they had heard news about monetary policy, but this effect fades within a few days. Those who heard news about the announcement do not seem to have understood the announcement. When provided with pertinent information about the new policy, households do not change their expectations. These patterns continue to hold 1 year after the announcement.
Date: 2023
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Related works:
Working Paper: Average Inflation Targeting and Household Expectations (2021) 
Working Paper: Average Inflation Targeting and Household Expectations (2020) 
Working Paper: Average Inflation Targeting and Household Expectations (2020) 
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Persistent link: https://EconPapers.repec.org/RePEc:ucp:jpemac:doi:10.1086/722962
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