Franklin

Expectations' Anchoring and Inflation Persistence [electronic resource] / Rudolfs Bems.

Author/Creator:
Bems, Rudolfs.
Publication:
Washington, D.C. : International Monetary Fund, 2018.
Format/Description:
Government document
Book
1 online resource (31 pages)
Series:
IMF eLibrary
IMF Working Papers; Working Paper ; No. 12/280
IMF Working Papers
Status/Location:
Loading...

Options
Location Notes Your Loan Policy

Details

Summary:
Understanding the sources of inflation persistence is crucial for monetary policy. This paper provides an empirical assessment of the influence of inflation expectations' anchoring on the persistence of inflation. We construct a novel index of inflation expectations' anchoring using survey-based inflation forecasts for 45 economies starting in 1989. We then study the response of consumer prices to terms-of-trade shocks for countries with flexible exchange rates. We find that these shocks have a significant and persistent effect on consumer price inflation when expectations are poorly anchored. By contrast, inflation reacts by less and returns quickly to its pre-shock level when expectations are strongly anchored.
Notes:
Part of the IMF eLibrary collection.
Description based on print version record.
Contributor:
Caselli, Francesca.
Other format:
Print Version: Bems, Rudolfs Expectations' Anchoring and Inflation Persistence
ISBN:
1484388844 :
9781484388846
Publisher Number:
10.5089/9781484388846.001 doi
Access Restriction:
Restricted for use by site license.