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How anchored are inflation expectations in EMU countries?

  • van der Cruijsen, Carin
  • Demertzis, Maria

Anchored inflation expectations help stabilize inflation. Previous results indicate that monetary policy has been effective in breaking the link between actual and expected inflation at the euro area level. In this paper we examine whether this is also true at the national level. We define the ‘disconnect’ between inflation and inflation expectations and then proceed to examine the extent to which this disconnect exists for a number of euro area countries. Our findings suggest that for some countries, their own inflation experiences still affect national inflation expectations, and certainly more by comparison to how they affect the aggregate euro area level.

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Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 28 (2011)
Issue (Month): 1 ()
Pages: 281-298

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Handle: RePEc:eee:ecmode:v:28:y:2011:i:1:p:281-298
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30411

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  1. Bomfim, Antulio N & Rudebusch, Glenn D, 2000. "Opportunistic and Deliberate Disinflation under Imperfect Credibility," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 32(4), pages 707-21, November.
  2. Maria Demertzis & Nicola Viegi, 2005. "Inflation Targets as Focal Points," Working Papers 02, Economic Research Southern Africa.
  3. Orphanides, Athanasios & Williams, John C., 2005. "Expectations, learning and monetary policy," Journal of Economic Dynamics and Control, Elsevier, vol. 29(11), pages 1807-1808, November.
  4. Maria Demertzis & Nicola Viegi, 2007. "Inflation Targeting - a Framework for Communication," DNB Working Papers 149, Netherlands Central Bank, Research Department.
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  7. Maria Demertzis & Andrew Hallett & Ole Rummel, 2000. "Is the European union a natural currency area, or is it held together by policy makers?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 136(4), pages 657-679, December.
  8. Rogers, John H., 2007. "Monetary union, price level convergence, and inflation: How close is Europe to the USA?," Journal of Monetary Economics, Elsevier, vol. 54(3), pages 785-796, April.
  9. Huchet, Marilyne, 2003. "Does single monetary policy have asymmetric real effects in EMU?," Journal of Policy Modeling, Elsevier, vol. 25(2), pages 151-178, February.
  10. Alex Brazier & Richard Harrison & Mervyn King & Tony Yates, 2008. "The Danger of Inflating Expectations of Macroeconomic Stability: Heuristic Switching in an Overlapping-Generations Monetary Model," International Journal of Central Banking, International Journal of Central Banking, vol. 4(2), pages 219-254, June.
  11. Nigel F.B. Allington & Paul A. Kattuman & Florian A. Waldmann, 2005. "One Market, One Money, One Price?," International Journal of Central Banking, International Journal of Central Banking, vol. 1(3), December.
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  14. repec:eui:euiwps:eco2010/10 is not listed on IDEAS
  15. Demertzis Maria & Marcellino Massimiliano & Viegi Nicola, 2012. "A Credibility Proxy: Tracking US Monetary Developments," The B.E. Journal of Macroeconomics, De Gruyter, vol. 12(1), pages 1-36, June.
  16. Allington, Nigel FB & Kattuman, Paul A & Waldmann, Florian A, 2005. "One Market, One Money, One Price?," MPRA Paper 835, University Library of Munich, Germany.
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