Inflation Expectations and Inflation Uncertainty in the Eurozone: Evidence from Survey Data
This paper uses the European Commissionâ€™s Consumer Survey to assess whether inflation expectations have converged and whether inflation uncertainty has diminished following the introduction of the Euro in Europe. Consumersâ€™ responses to the survey suggest that inflation expectations depend more on past national inflation rates than on the ECBâ€™s anchor for price stability. The convergence in inflation expectations does not appear to be faster than the convergence in actual inflation rates. Regarding inflation uncertainty, the data indicate a relationship with country size, suggesting that within EMU, inflation uncertainty may increase in countries that have a smaller influence on ECB policy.
(This abstract was borrowed from another version of this item.)
Volume (Year): 144 (2008)
Issue (Month): 2 (July)
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