Imperfect Information and Consumer Inflation Expectations: Evidence from Microdata.

Dräger, Lena; Lamla, Michael J.

This paper explores which factors trigger an adjustment in consumers' inflation expectations and looks at the implications regarding forecast errors. We find support for imperfect information models, as inflation volatility and news trigger an adjustment in expectations. Furthermore, we document that individual expectations become more accurate if they have been adjusted.

INFLATION forecasting; MARKET volatility; INFORMATION modeling; ECONOMIC policy; ACCURACY

Oxford Bulletin of Economics & Statistics, 2017, Vol 79, Issue 6, p933

0305-9049

Academic Journal

10.1111/obes.12189