What drives inflation expectations in Brazil? Public versus private information

Waldyr Areosa

No 544, BIS Working Papers from Bank for International Settlements

Abstract: This article applies a noisy information model with strategic interactions à la Morris and Shin (2002) to a panel from the Central Bank of Brazil Market Expectations System to provide evidence of how professional forecasters weight private and public information when building inflation expectations in Brazil. The main results are: (i) forecasters attach more weight to public information than private information because (ii) public information is more precise than private information. Nevertheless, (iii) forecasters overweight private information in order to (iv) differentiate themselves from each other (strategic substitutability).

Keywords: incomplete information; public information; coordination; complementarities; externalities (search for similar items in EconPapers)
Pages: 27 pages
Date: 2016-01
New Economics Papers: this item is included in nep-cba and nep-lam
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Citations: View citations in EconPapers (5)

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Working Paper: What drives inflation expectations in Brazil? Public versus private information (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:bis:biswps:544

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