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Anchored or de-anchored? That is the question

Author

Listed:
  • Francesco Corsello

    (Bank of Italy)

  • Stefano Neri

    (Bank of Italy)

  • Alex Tagliabracci

    (Bank of Italy)

Abstract

This paper shows that long-term inflation expectations have de-anchored from the ECB Governing Council’s inflation aim. Long-term expectations from the ECB’s Survey of Professional Forecasters have not returned to the levels that prevailed before the 2013-14 disinflation, and their distribution remains tilted to the downside. Long-term expectations have become sensitive to short-term ones and to negative surprises to inflation. Forecasters who have participated to most of the survey rounds are the most responsive to short-term developments in inflation.

Suggested Citation

  • Francesco Corsello & Stefano Neri & Alex Tagliabracci, 2019. "Anchored or de-anchored? That is the question," Questioni di Economia e Finanza (Occasional Papers) 516, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_516_19
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    More about this item

    Keywords

    inflation expectations; anchoring; monetary policy;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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