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The Properties of Survey-Based Inflation Expectations in Sweden

Author

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  • Jonsson, Thomas

    () (National Institute of Economic Research)

  • Österholm, Pär

    () (National Institute of Economic Research)

Abstract

This paper assesses the properties of survey-based inflation expectations in Sweden. The survey is conducted by Prospera once every quarter and consists of respondents from businesses and labour-market organisa-tions. The paper shows that inflation expectations measured in this sur-vey tend to be biased and inefficient forecasts of future inflation. Results also indicate that long-run inflation expectations are overly adaptive with respect to actual inflation. Finally, evaluations of forecast accuracy show that these inflation expectations are worse predictors of inflation than those of a professional forecasting institution and also typically outper-formed by a simple autoregressive model. Overall, our results indicate that economic agents’ expectations formation process is suboptimal and/or the survey fails to capture the true inflation expectations.

Suggested Citation

  • Jonsson, Thomas & Österholm, Pär, 2009. "The Properties of Survey-Based Inflation Expectations in Sweden," Working Papers 114, National Institute of Economic Research.
  • Handle: RePEc:hhs:nierwp:0114
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    Citations

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    Cited by:

    1. Thomas Jonsson & Pär Österholm, 2012. "The properties of survey-based inflation expectations in Sweden," Empirical Economics, Springer, vol. 42(1), pages 79-94, February.
    2. Oscar Claveria & Enric Monte & Salvador Torra, 2018. "“Tracking economic growth by evolving expectations via genetic programming: A two-step approach”," AQR Working Papers 201801, University of Barcelona, Regional Quantitative Analysis Group, revised Jan 2018.
    3. repec:spr:qualqt:v:51:y:2017:i:6:d:10.1007_s11135-016-0416-0 is not listed on IDEAS
    4. Hjalmarsson, Erik & Österholm, Pär, 2017. "Households’ Mortgage-Rate Expectations: More Realistic than at First Glance?," Working Papers 2017:9, Örebro University, School of Business.
    5. repec:spr:soinre:v:135:y:2018:i:1:d:10.1007_s11205-016-1490-3 is not listed on IDEAS
    6. Oscar Claveria & Enric Monte & Salvador Torra, 2017. "Let the data do the talking: Empirical modelling of survey-based expectations by means of genetic programming," IREA Working Papers 201711, University of Barcelona, Research Institute of Applied Economics, revised May 2017.
    7. Meredith Beechey & Pär Österholm, 2014. "Policy interest-rate expectations in Sweden: a forecast evaluation," Applied Economics Letters, Taylor & Francis Journals, vol. 21(14), pages 984-991, September.
    8. repec:spr:epolit:v:35:y:2018:i:2:d:10.1007_s40888-018-0111-9 is not listed on IDEAS
    9. Lars E. O. Svensson, 2015. "The Possible Unemployment Cost of Average Inflation below a Credible Target," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(1), pages 258-296, January.
    10. Carlos Huertas Campos & Eliana González Molano & Cristhian Ruiz Cardozo, 2015. "La formación de expectativas de inflación en Colombia," BORRADORES DE ECONOMIA 012699, BANCO DE LA REPÚBLICA.

    More about this item

    Keywords

    Survey data; Inflation targeting;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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