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Sources of dispersion in consumer inflation forecasts

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  • N. T. Valev
  • J. A. Carlson

Abstract

Cross-section dispersion of expected inflation is often explained by differences in information sets across agents, but there is little empirical evidence attesting to that. This paper uses unique survey data from Bulgaria to show that consumers' perceptions of past movements and expectations of future movements in the general price level are influenced by their direct observations of the price dynamics of particular products.

Suggested Citation

  • N. T. Valev & J. A. Carlson, 2003. "Sources of dispersion in consumer inflation forecasts," Applied Economics Letters, Taylor & Francis Journals, vol. 10(2), pages 77-81.
    • Handle: RePEc:taf:apeclt:v:10:y:2003:i:2:p:77-81
    DOI: 10.1080/13504850210148152
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    References listed on IDEAS

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    1. Batchelor, Roy & Orr, Adrian, 1991. "Inflation uncertainty, inflationary shocks and the credibility of counterinflation policy," European Economic Review, Elsevier, vol. 35(7), pages 1385-1397, October.
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    3. Pentti Vartia & Reijo Mankinen, 1984. "Perceived and expected price changes in Finland," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 120(1), pages 121-132, March.
    4. Lucas, Robert Jr., 1972. "Expectations and the neutrality of money," Journal of Economic Theory, Elsevier, vol. 4(2), pages 103-124, April.
    5. Schwartz, Anna J., 1993. "Currency boards: their past, present, and possible future role," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 147-187, December.
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    Citations

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    Cited by:

    1. Carlos Capistr¡N & Allan Timmermann, 2009. "Disagreement and Biases in Inflation Expectations," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(2-3), pages 365-396, March.
    2. Carlos Capistrán & Allan Timmermann, 2009. "Disagreement and Biases in Inflation Expectations," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(2‐3), pages 365-396, March.
    3. Camille Cornand & Paul Hubert, 2021. "Information frictions in inflation expectations among five types of economic agents," Working Papers halshs-03351632, HAL.
    4. Camille Cornand & Paul Hubert, 2021. "Information frictions in inflation expectations among five types of economic agents," Working Papers hal-03468918, HAL.
    5. Cornand, Camille & Hubert, Paul, 2022. "Information frictions across various types of inflation expectations," European Economic Review, Elsevier, vol. 146(C).
    6. Jan Babecky & Jiri Podpiera, 2008. "Inflation Forecasts Errors in the Czech Republic: Evidence from a Panel of Institutions," Occasional Publications - Chapters in Edited Volumes, in: Katerina Smidkova (ed.), Evaluation of the Fulfilment of the CNB's Inflation Targets 1998-2007, chapter 6, pages 77-85, Czech National Bank.

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