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Inflation Expectations and Inflation Uncertainty in the Eurozone: Evidence from Survey Data

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  • Ivo J.M. Arnold

    ()

  • Jan J.G. Lemmen

Abstract

This paper uses the European Commission’s Consumer Survey to assess whether inflation expectations have converged and whether inflation uncertainty has diminished following the introduction of the Euro in Europe. Consumers’ responses to the survey suggest that inflation expectations depend more on past national inflation rates than on the ECB’s anchor for price stability. The convergence in inflation expectations does not appear to be faster than the convergence in actual inflation rates. Regarding inflation uncertainty, the data indicate a relationship with country size, suggesting that within EMU, inflation uncertainty may increase in countries that have a smaller influence on ECB policy.

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Bibliographic Info

Article provided by Springer in its journal Review of World Economics.

Volume (Year): 144 (2008)
Issue (Month): 2 (July)
Pages: 325-346

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Handle: RePEc:spr:weltar:v:144:y:2008:i:2:p:325-346

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Related research

Keywords: Monetary union; inflation differentials; consumer survey;

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References

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Cited by:
  1. Forges, Françoise & Koessler, Frédéric, 2008. "Long persuasion games," Journal of Economic Theory, Elsevier, vol. 143(1), pages 1-35, November.
  2. Guglielmo Maria Caporale & Luca Onorante & Paolo Paesani, 2009. "Inflation and Inflation Uncertainty in the Euro Area," Discussion Papers of DIW Berlin 909, DIW Berlin, German Institute for Economic Research.
  3. Andrzej Toroj, 2009. "Macroeconomic adjustment and heterogeneity in the euro area," National Bank of Poland Working Papers 54, National Bank of Poland, Economic Institute.
  4. Klaus Abberger & Gebhard Flaig & Wolfgang Nierhaus, 2007. "ifo Konjunkturumfragen und Konjunkturanalyse : ausgewählte methodische Aufsätze aus dem ifo Schnelldienst," ifo Forschungsberichte, Ifo Institute for Economic Research at the University of Munich, number 33, 8.
  5. Malikane, Christopher & Mokoka, Tshepo, 2012. "Monetary policy credibility: A Phillips curve view," The Quarterly Review of Economics and Finance, Elsevier, vol. 52(3), pages 266-271.
  6. Steffen Henzel & Stephan Sauer, 2006. "Konsequenzen der Inflationsunterschiede im Euroraum," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 59(11), pages 12-27, 06.

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