Householders’ Inflation Expectations

Andrea Brischetto and Gordon de Brouwer
Additional contact information
Andrea Brischetto: Reserve Bank of Australia
Gordon de Brouwer: Reserve Bank of Australia

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: Inflation expectations have wide-reaching effects on the macroeconomy and are an important part of the transmission of monetary policy. This paper analyses the Melbourne Institute survey of householders’ inflation expectations. Householders’ average inflation expectations vary with personal characteristics. People with better access to information or more developed information-processing skills – such as professionals, those with more education, or older people – tend to have lower and more accurate inflation expectations. While inflation expectations are not correlated with the structural determinants of inflation (like the output gap, exchange rate movements or wages growth), tighter monetary policy does appear to reduce expected inflation. People also associate ‘good times’ with strong growth, low unemployment and low inflation. It is shown that householders’ inflation expectations do not appear to fully incorporate information about past inflation and exchange rate movements.

Keywords: inflation; expectations (search for similar items in EconPapers)
JEL-codes: D84 E31 O56 (search for similar items in EconPapers)
Date: 1999-01
New Economics Papers: this item is included in nep-mon
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.rba.gov.au/publications/rdp/1999/pdf/rdp1999-03.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rba:rbardp:rdp1999-03

Access Statistics for this paper

More papers in RBA Research Discussion Papers from Reserve Bank of Australia Contact information at EDIRC.
Bibliographic data for series maintained by Paula Drew ().