IDEAS home Printed from
   My bibliography  Save this article

Survey Evidence on the Muthian Rationality of the Inflation Forecasts of U.S. Consumers


  • Baghestani, Hamid


Since January 1978, the University of Michigan Survey Research Center has been collecting the monthly year-ahead inflation forecasts of U.S. consumers. Following the implications of Muthian rational expectations, the author uses L. P. Hansen and R. J. Hodrick's procedure to examine whether these data are unbiased, and whether they outperform comparable nonsurvey augmented-adaptive and naive forecasts in terms of predictive information content. It is concluded that the survey data (unlike the nonsurvey forecasts) are biased. However, they contain more predictive information than that included in the naive forecasts but lack the predictive information contained in the forecasts generated from the augmented-adaptive Phillips curve type model. Copyright 1992 by Blackwell Publishing Ltd

Suggested Citation

  • Baghestani, Hamid, 1992. "Survey Evidence on the Muthian Rationality of the Inflation Forecasts of U.S. Consumers," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(2), pages 173-186, May.
  • Handle: RePEc:bla:obuest:v:54:y:1992:i:2:p:173-86

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    References listed on IDEAS

    1. von Braun, Joachim & Pandya-Lorch, Rajul, 1991. "Income sources of malnourished people in rural areas: Microlevel information and policy implications," IFPRI working papers 5, International Food Policy Research Institute (IFPRI).
    2. repec:pje:journl:article1982winii is not listed on IDEAS
    3. John C. H. Fei & Gustav Ranis & Shirley W. Y. Kuo, 1978. "Growth and the Family Distribution of Income by Factor Components," The Quarterly Journal of Economics, Oxford University Press, vol. 92(1), pages 17-53.
    4. Glewwe, Paul, 1986. "The distribution of income in Sri Lanka in 1969-1970 and 1980-1981 : A decomposition analysis," Journal of Development Economics, Elsevier, vol. 24(2), pages 255-274, December.
    5. Quan, Nguyen T., 1989. "Concentration of income and land holdings : Prediction by latent variables model and partial least squares," Journal of Development Economics, Elsevier, vol. 31(1), pages 55-76, July.
    6. Fields, Gary S, 1979. "Income Inequality in Urban Colombia: A Decomposition Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 25(3), pages 327-341, September.
    7. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-156, February.
    8. Hans De Kruijk, 1987. "Sources of Income Inequality in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 26(4), pages 659-672.
    9. Graham Pyatt & Chau-nan Chen & John Fei, 1980. "The Distribution of Income by Factor Components," The Quarterly Journal of Economics, Oxford University Press, vol. 95(3), pages 451-473.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Roberts, John M., 1997. "Is inflation sticky?," Journal of Monetary Economics, Elsevier, vol. 39(2), pages 173-196, July.
    2. Grant, Alan P. & Thomas, Lloyd B., 2001. "Supply shocks and the rationality of inflation forecasts," The Quarterly Review of Economics and Finance, Elsevier, vol. 41(4), pages 515-532.
    3. Ricardo Nunes, 2010. "Inflation Dynamics: The Role of Expectations," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(6), pages 1161-1172, September.
    4. Silva Lopes, Artur, 1994. "A "hipótese das expectativas racionais": teoria e realidade (uma visita guiada à literatura até 1992)
      [The "rational expectations hypothesis": theory and reality (a guided tour
      ," MPRA Paper 9699, University Library of Munich, Germany, revised 23 Jul 2008.
    5. Hasan Bakhshi & Anthony Yates, 1998. "Are UK inflation expectations rational?," Bank of England working papers 81, Bank of England.
    6. Gerberding, Christina, 2001. "The information content of survey data on expected price developments for monetary policy," Discussion Paper Series 1: Economic Studies 2001,09, Deutsche Bundesbank.
    7. Campbell III, Carl M., 2008. "An efficiency wage approach to reconciling the wage curve and the Phillips curve," Labour Economics, Elsevier, vol. 15(6), pages 1388-1415, December.
    8. Curto Millet, Fabien, 2007. "Inflation Expectations, the Phillips Curve and Monetary Policy," Kiel Working Papers 1339, Kiel Institute for the World Economy (IfW).

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:obuest:v:54:y:1992:i:2:p:173-86. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.