Template-Type: ReDIF-Paper 1.0
Author-Name: Nikos Apokoritis
Author-X-Name-First: Nikos
Author-X-Name-Last: Apokoritis
Author-Name: Gabriele Galati
Author-X-Name-First: Gabriele
Author-X-Name-Last: Galati
Author-Name: Richhild Moessner
Author-X-Name-First: Richhild
Author-X-Name-Last: Moessner
Author-Name: Federica Teppa
Author-X-Name-First: Federica
Author-X-Name-Last: Teppa
Title: Inflation expectations anchoring: new insights from micro evidence of a survey at high-frequency and of distributions
Abstract: We shed new light on the anchoring of long-term euro area inflation expectations since the crisis by using micro evidence from a new survey at high (weekly) frequency. We find that long-term inflation expectations remained well anchored to the ECB's inflation aim, which has acted as a focal point. By contrast, we find no evidence that professional forecasts (reported by Consensus Economics) acted as focal points. But there are subtle signs of long-term inflation expectations not being perfectly well-anchored. Using measures based on the distribution of inflation expectations from a quarterly survey, namely uncertainty based on the full distribution, the probability of expected long-term inflation lying between 1.5% and 2.5%, and the effect of short-term on long-term deflation risk, we find that long-term euro area inflation expectations have remained well-anchored, and have become better-anchored between 2011 and 2018.
Length: 21 pages
Creation-Date: 2019-09
File-URL: https://www.bis.org/publ/work809.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work809.htm
File-Format: text/html
Number: 809
Classification-JEL: E31, E58, F62
Keywords: inflation expectations
Handle: RePEc:bis:biswps:809