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Inflation expectations and the great recession

Author

Listed:
  • Petra Gerlach
  • Peter Hördahl
  • Richhild Moessner

Abstract

This article examines whether short-run inflation expectations and indicators of long-term credibility have been affected by the great recession and by the policies to counter it. Measures of short-run expectations dropped in the crisis, particularly in advanced economies, but have since rebounded. Measures of long-run inflation expectations have in general fluctuated around a relatively stable level, suggesting continued central bank credibility. At the same time, dispersion and uncertainty measures of long-term inflation expectations are somewhat higher than before the crisis, raising questions about how firmly expectations are anchored.

Suggested Citation

  • Petra Gerlach & Peter Hördahl & Richhild Moessner, 2011. "Inflation expectations and the great recession," BIS Quarterly Review, Bank for International Settlements, March.
  • Handle: RePEc:bis:bisqtr:1103f
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    References listed on IDEAS

    as
    1. Hördahl, Peter & Tristani, Oreste, 2010. "Inflation risk premia in the US and the euro area," Working Paper Series 1270, European Central Bank.
    2. Gabriela Galati & Steven Poelhekke & Chen Zhou, 2011. "Did the Crisis Affect Inflation Expectations?," International Journal of Central Banking, International Journal of Central Banking, vol. 7(1), pages 167-207, March.
    3. Wändi Bruine De Bruin & Charles F. Manski & Giorgio Topa & Wilbert van der Klaauw, 2011. "Measuring consumer uncertainty about future inflation," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 26(3), pages 454-478, April.
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    Citations

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    Cited by:

    1. Boris Hofmann & Feng Zhu, 2013. "Central bank asset purchases and inflation expectations," BIS Quarterly Review, Bank for International Settlements, March.
    2. Ross Kendall & Tim Ng, 2013. "Estimated Taylor Rules updated for the post-crisis period," Reserve Bank of New Zealand Analytical Notes series AN2013/04, Reserve Bank of New Zealand.
    3. repec:bpj:jeehcn:v:22:y:2016:i:2:p:113-138:n:2 is not listed on IDEAS
    4. Tomasz Łyziak, 2016. "The impact of financial crisis and low inflation environment on short-term inflation expectations in Poland," NBP Working Papers 235, Narodowy Bank Polski, Economic Research Department.
    5. Aleksei Netšunajev & Lars Winkelmann, 2016. "International dynamics of inflation expectations," SFB 649 Discussion Papers SFB649DP2016-019, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    6. Oya Celasun & Lev Ratnovski & Roxana Mihet, 2012. "Commodity Prices and Inflation Expectations in the United States," IMF Working Papers 12/89, International Monetary Fund.
    7. Petra Gerlach-Kristen & Richhild Moessner & Rina Rosenblatt-Wisch, 2017. "Computing long‐term market inflation expectations for countries without inflation expectation markets," Working Papers 2017-09, Swiss National Bank.

    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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