International evidence on inflation expectations during Sustained Off-Target Inflation episodes
The high level of UK inflation in recent years raises the possibility that inflation expectations may drift upwards, making the period of above-target inflation last for longer. This article presents some evidence on inflation expectations during Sustained Off-Target Inflation (SOTI) episodes in other inflation-targeting countries and outlines some of the key trends. The evidence suggests that short and medium-term inflation expectations have tended to drift in the direction of the deviation of inflation from target. But generally the movements in inflation expectations were more gradual than movements in inflation itself and expectations returned to their previous level once inflation returned to target.
Volume (Year): 51 (2011)
Issue (Month): 2 ()
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- Gill Hammond, 2012. "State of the art of inflation targeting," Handbooks, Centre for Central Banking Studies, Bank of England, edition 4, number 29.
- Macallan, Clare & Taylor, Tim & O'Grady, Tom, 2011. "Assessing the risk to inflation from inflation expectations," Bank of England Quarterly Bulletin, Bank of England, vol. 51(2), pages 100-110.
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