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Recent changes in consumers’ medium-term inflation expectations – a detailed look

Author

Listed:
  • Georgarakos, Dimitris
  • Kenny, Geoff
  • Meyer, Justus

Abstract

In this article we exploit the richness and flexible design of the CES to explore in detail recent changes in consumers’ medium-term inflation expectations. The data suggest that over the course of 2022 these expectations became less well anchored around the ECB’s 2% inflation target. By taking the necessary actions and actively communicating how monetary policy is contributing to stabilising future inflation, the ECB can help strengthen public trust and prevent recent price and cost shocks from having longer-lasting inflationary effects. JEL Classification: C83, D84, E31, E37, E52, E58

Suggested Citation

  • Georgarakos, Dimitris & Kenny, Geoff & Meyer, Justus, 2023. "Recent changes in consumers’ medium-term inflation expectations – a detailed look," Research Bulletin, European Central Bank, vol. 104.
    • Handle: RePEc:ecb:ecbrbu:2023:0104:
    Note: 483508
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    References listed on IDEAS

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    1. Dimitris Christelis & Dimitris Georgarakos & Tullio Jappelli & Maarten van Rooij, 2020. "Trust in the Central Bank and Inflation Expectations," International Journal of Central Banking, International Journal of Central Banking, vol. 16(6), pages 1-37, December.
    2. Olivier Coibion & Yuriy Gorodnichenko & Tiziano Ropele, 2020. "Inflation Expectations and Firm Decisions: New Causal Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(1), pages 165-219.
    3. Bernardo Candia & Olivier Coibion & Yuriy Gorodnichenko, 2022. "The Macroeconomic Expectations of Firms," NBER Working Papers 30042, National Bureau of Economic Research, Inc.
    4. Ethan M. L. McClure & Olivier Coibion & Yuriy Gorodnichenko, 2022. "The Macroeconomic Expectations of U.S. Managers," NBER Working Papers 29986, National Bureau of Economic Research, Inc.
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      More about this item

      Keywords

      Consumer Expectations Survey; Inflation expectations; Trust;
      All these keywords.

      JEL classification:

      • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
      • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
      • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
      • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
      • 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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