Anchoring Inflation Expectations in Unconventional Times: Micro Evidence for the Euro Area

Dovern J, Kenny G (2020)

Publication Language: English

Publication Type: Journal article, Original article

Publication year: 2020

Journal

International Journal of Central Banking

Book Volume: 64

Pages Range: 309 - 347

URI: https://www.ijcb.org/journal/ijcb20q4a8.htm

Open Access Link: https://www.ijcb.org/journal/ijcb20q4a8.pdf

Abstract

We exploit micro data from professional forecasters to examine the stability of the distribution of long-term inflation expectations in the euro area following the Great Recession. Although mean expectations declined somewhat, we find no evidence that the central tendency of the long-run distribution became unanchored. Also, the degree of co-movement of expectations with other variables did not increase noticeably. In contrast, long-term inflation uncertainty increased and expectations became negatively skewed. Such findings are in line with the predictions of theoretical models emphasizing the impact of the lower bound on policy rates and uncertainty about the transmission of unconventional monetary policies.

Authors with CRIS profile

Jonas Dovern Lehrstuhl für Statistik und Ökonometrie

Related research project(s)

Heterogenität makroökonomischer Erwartungen: Welche Rolle spielen individuelle historische Erfahrungen, das örtliche Umfeld und sozioökonomische Faktoren? July 1, 2019 - Dec. 31, 2022

Involved external institutions

Die Europäische Zentralbank / European Central Bank (EZB / ECB) DE Germany (DE)

How to cite

APA:

Dovern, J., & Kenny, G. (2020). Anchoring Inflation Expectations in Unconventional Times: Micro Evidence for the Euro Area. International Journal of Central Banking, 64, 309 - 347.

MLA:

Dovern, Jonas, and Geoff Kenny. "Anchoring Inflation Expectations in Unconventional Times: Micro Evidence for the Euro Area." International Journal of Central Banking 64 (2020): 309 - 347.

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