 How to Limit the Spillover from the 2021 Inflation Surge to Inflation Expectations?Lena Dräger, Michael Lamla and Damjan Pfajfar No 407, Working Paper Series in Economics from University of Lüneburg, Institute of Economics Abstract: By providing numerical inflation projections. Many central banks currently face inflation well above their targets and with that the challenge to prevent spillovers on inflation expectations. We study the effect of different communication about the 2021 inflation surge on German con-sumers’ inflation expectations using a randomized control trial. We show that information about rising inflation increases short- and long-term inflation expectations. This initial increase in expectations can be mitigated using information about inflation projections, where numerical information about professional forecasters’ projections seems to reduce inflation expectations by more than policymaker’s characterization of inflation as a temporary phenomenon. Keywords: Short-run and long-run inflation expectations; inflation surge; randomized control trial; survey experiment; persistent or transitory inflation shock (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:lue:wpaper:407 Access Statistics for this paper More papers in Working Paper Series in Economics from University of Lüneburg, Institute of Economics |
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