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Survey Measures of Expected U.S. Inflation

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  • Lloyd B. Thomas

Abstract

The forecasting performance of widely accessible surveys of expected inflation are evaluated against naive and financial market benchmark forecasts. In the period of rising inflation (1960-80), the Michigan household consensus forecasts exhibited smaller errors than the Livingston Survey of economists and the benchmark forecasts. Unlike Livingston, the Michigan forecasts were unbiased. Since 1980, Livingston forecasts have been more accurate than Michigan, though unbiasedness is rejected in both cases. SPF forecasts, available since 1981, have been slightly superior to Livingston. In forecasting inflation, respondents generally failed to take account of cyclical conditions, and strong-form rationality is not supported.

Suggested Citation

  • Lloyd B. Thomas, 1999. "Survey Measures of Expected U.S. Inflation," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 125-144, Fall.
  • Handle: RePEc:aea:jecper:v:13:y:1999:i:4:p:125-144
    Note: DOI: 10.1257/jep.13.4.125
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.13.4.125
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    References listed on IDEAS

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    8. Herbert E. Taylor, 1992. "The Livingston Surveys: a history of hopes and fears," Business Review, Federal Reserve Bank of Philadelphia, issue Jan, pages 15-27.
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    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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