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Inflation Perceptions and Anticipations in the Old Eurozone Member States

Author

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  • Svatopluk Kapounek
  • Lubor Lacina

Abstract

There is empirical evidence that the introduction of the euro led to a significant increase of perceived inflation in most countries. Such an increase and persistence in the perceived inflation might then have an impact on inflation expectations and other macroeconomic variables. The authors have used expectational errors to describe the difference between inflation expectations/anticipations and its observed values, subsequently to identify the causality between these variables.

Suggested Citation

  • Svatopluk Kapounek & Lubor Lacina, 2011. "Inflation Perceptions and Anticipations in the Old Eurozone Member States," Prague Economic Papers, University of Economics, Prague, vol. 2011(2), pages 120-139.
  • Handle: RePEc:prg:jnlpep:v:2011:y:2011:i:2:id:392:p:120-139
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    References listed on IDEAS

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    1. Paolo Del Giovane & Roberto Sabbatini, 2006. "Perceived and Measured Inflation after the Launch of the Euro: Explaining the Gap in Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 65(2), pages 155-192, November.
    2. Andolfatto, David & Scott Hendry & Kevin Moran, 2002. "Inflation Expectations and Learning about Monetary Policy," Staff Working Papers 02-30, Bank of Canada.
    3. Gylfason, Thorvaldur, 1981. "Interest Rates, Inflation, and the Aggregate Consumption Function," The Review of Economics and Statistics, MIT Press, vol. 63(2), pages 233-245, May.
    4. Robert Dimand, 2002. "Patinkin on Irving Fisher's monetary economics," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 9(2), pages 308-326.
    5. Heijdra, Ben J., 2017. "Foundations of Modern Macroeconomics," OUP Catalogue, Oxford University Press, edition 3, number 9780198784135.
    6. Kemp, Simon & Willetts, Karyn, 1996. "Remembering the price of wool," Journal of Economic Psychology, Elsevier, vol. 17(1), pages 115-125, February.
    7. Pesaran, M Hashem, 1985. "Formation of Inflation Expectations in British Manufacturing Industries," Economic Journal, Royal Economic Society, vol. 95(380), pages 948-975, December.
    8. Friedrich Heinemann & Katrin Ullrich, 2006. "The Impact of EMU on Inflation Expectations," Open Economies Review, Springer, vol. 17(2), pages 175-195, April.
    9. 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.
    10. Jan-Egbert Sturm & Ulrich Fritsche & Michael Graff & Michael Lamla & Sarah Lein & Volker Nitsch & David Liechti & Daniel Triet, 2009. "The euro and prices: changeover-related inflation and price convergence in the euro area," European Economy - Economic Papers 2008 - 2015 381, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    11. Brachinger, Hans Wolfgang, 2006. "Euro or “Teuro”?: The Euro-induced Perceived Inflation in Germany," DQE Working Papers 5, Department of Quantitative Economics, University of Freiburg/Fribourg Switzerland.
    12. John A. Carlson & Neven T. Valev, 2002. "A Disinflation Trade-Off: Speed Versus Final Destination," Economic Inquiry, Western Economic Association International, vol. 40(3), pages 450-456, July.
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    Citations

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    Cited by:

    1. Jaroslav Bukovina, 2015. "Sentiment of a society and large-cap stock liquidity," MENDELU Working Papers in Business and Economics 2015-56, Mendel University in Brno, Faculty of Business and Economics.
    2. repec:fau:fauart:v:67:y:2017:i:2:p:119-139 is not listed on IDEAS
    3. Jaroslav Bukovina, 2015. "Sentiment and blue-chip returns. Firm level evidence from a dynamic threshold model," MENDELU Working Papers in Business and Economics 2015-53, Mendel University in Brno, Faculty of Business and Economics.
    4. Crespo Cuaresma, Jesús & Fidrmuc, Jarko & Hake, Mariya, 2014. "Demand and supply drivers of foreign currency loans in CEECs: A meta-analysis," Economic Systems, Elsevier, vol. 38(1), pages 26-42.

    More about this item

    Keywords

    monetary integration; perceived and anticipated inflation; adaptive and rational expectations hypothesis; stationarity; ADF test; Granger Non-Causality;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F15 - International Economics - - Trade - - - Economic Integration

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