The Subjective Inflation Expectations of Households and Firms: Measurement, Determinants, and Implications
Journal of Economic Perspectives
vol. 36,
no. 3, Summer 2022
(pp. 157-84)
(Complimentary)
Abstract
Households' and firms' subjective inflation expectations play a central role in macroeconomic and intertemporal microeconomic models. We discuss how subjective inflation expectations are measured, the patterns they display, their determinants, and how they shape households' and firms' economic choices in the data and help us make sense of the observed heterogeneous reactions to business-cycle shocks and policy interventions. We conclude by highlighting the relevant open questions and why tackling them is important for academic research and policymaking.Citation
Weber, Michael, Francesco D'Acunto, Yuriy Gorodnichenko, and Olivier Coibion. 2022. "The Subjective Inflation Expectations of Households and Firms: Measurement, Determinants, and Implications." Journal of Economic Perspectives, 36 (3): 157-84. DOI: 10.1257/jep.36.3.157Additional Materials
JEL Classification
- C83 Survey Methods; Sampling Methods
- D84 Expectations; Speculations
- E31 Price Level; Inflation; Deflation
- E37 Prices, Business Fluctuations, and Cycles: Forecasting and Simulation: Models and Applications
- E52 Monetary Policy
- E58 Central Banks and Their Policies
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