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Household Inflation Expectations in France: Lessons from a New Survey and the COVID-19 Crisis

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  • Erwan Gautier
  • Jérémi Montornès

Abstract

[eng] This article documents several stylised facts about household inflation expectations in France based on data from a new survey by the European Central Bank, the Consumer Expectation Survey, conducted online among thousands of households between 2020 and 2021. The results are compared with those from the INSEE CAMME survey (a monthly consumer confidence survey), which has been carried out for many years. The conclusions drawn from the results obtained through these two surveys converge: the level of inflation anticipated by households is higher than actual or forecasted inflation. During the period 2020-2021, inflation expectations were positively correlated not only with current inflation, but also with the expected level of unemployment. During the COVID-19 crisis, only the first lockdown had a positive effect on expectations. However, the methodology of the two surveys differs, leading to discrepancies in the extent of the bias on current inflation, the dispersion of expected inflation or the intensity of correlations with actual inflation or with unemployment.

Suggested Citation

  • Erwan Gautier & Jérémi Montornès, 2022. "Household Inflation Expectations in France: Lessons from a New Survey and the COVID-19 Crisis," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 534-35, pages 3-19.
    • Handle: RePEc:nse:ecosta:ecostat_2022_534_1
    DOI: https://doi.org/10.24187/ecostat.2022.534.2076
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    References listed on IDEAS

    as
    1. Andrade, Philippe & Gautier, Erwan & Mengus, Eric, 2023. "What matters in households’ inflation expectations?," Journal of Monetary Economics, Elsevier, vol. 138(C), pages 50-68.
    2. Castelletti-Font Barbara, & Gautier Erwan, & Ulgazi Youssef, & Vertier Paul., 2021. "Inflation in France during the lockdowns [L’inflation en France durant les confinements]," Bulletin de la Banque de France, Banque de France, issue 234.
    3. Rüdiger Bachmann & Tim O. Berg & Eric R. Sims, 2015. "Inflation Expectations and Readiness to Spend: Cross-Sectional Evidence," American Economic Journal: Economic Policy, American Economic Association, vol. 7(1), pages 1-35, February.
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    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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