Anchoring Households' Inflation Expectations when Inflation is High

Giang Nghiem, Lena Dräger and Ami Dalloul

Hannover Economic Papers (HEP) from Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät

Abstract: This paper explores communication strategies for anchoring households' medium-term inflation expectations in a high inflation environment. We conducted a survey experiment with a representative sample of 4,000 German households at the height of the recent inflation surge in early 2023, with information treatments including a qualitative statement by the ECB president and quantitative information about the ECB's inflation target or projected inflation. Inflation projections are most effective, but combining information about the target with a qualitative statement also significantly improves anchoring. The treatment effects are particularly pronounced among respondents with high financial literacy and high trust in the central bank.

Keywords: anchoring of inflation expectations; central bank communication; survey experiment; randomized controlled trial (RCT) (search for similar items in EconPapers)
JEL-codes: D84 E31 E52 (search for similar items in EconPapers)
Pages: 65 pages
Date: 2024-10
New Economics Papers: this item is included in nep-ban, nep-cba, nep-eec, nep-exp and nep-mon
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Anchoring Households’ Inflation Expectations When Inflation Is High (2024)
Working Paper: Anchoring Household's Inflation Expectations when Inflation is High (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:han:dpaper:dp-719

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