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Do individuals expect the Phillips curve? Evidence from the European Consumer Expectations Survey

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  • Kirpson, Gerda
  • Staehr, Karsten

Abstract

Are the expectations of individuals in Europe consistent with the Phillips curve? To investigate we run panel data estimations on micro data from the European Consumer Expectations Survey. The estimations reveal a positive relationship between expected inflation and economic slack. This lack of consistency with the Phillips curve holds even when proxies for supply shocks are included.

Suggested Citation

  • Kirpson, Gerda & Staehr, Karsten, 2024. "Do individuals expect the Phillips curve? Evidence from the European Consumer Expectations Survey," Economics Letters, Elsevier, vol. 234(C).
    • Handle: RePEc:eee:ecolet:v:234:y:2024:i:c:s0165176523004561
    DOI: 10.1016/j.econlet.2023.111430
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    References listed on IDEAS

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    1. Peter Andrebriq & Carlo Pizzinelli & Christopher Roth & Johannes Wohlfart, 2022. "Subjective Models of the Macroeconomy: Evidence From Experts and Representative Samples," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(6), pages 2958-2991.
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    More about this item

    Keywords

    Expectations; Inflation; Phillips curve; Survey;
    All these keywords.

    JEL classification:

    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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