Seminar

Past

How to Limit the Spillover from an Inflation Surge to Inflation Expectations?

Damjan Pfajfar

  • Date16 November 2023
  • Time 11h30 - 12h30
  • Room F148 & Online

Résumé

We study the effects of forward-looking communication in an environment of rising inflation rates on German consumers’ 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 forward-looking information about inflation. Among these information treatments, professional forecasters’ projections seem to reduce inflation expectations by more than policymaker’s characterization of inflation as a temporary phenomenon.

Related document(s)

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