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Who Cares about Inflation? Empirical Evidence from the Czech Republic

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  • Michael Berlemann

    (Helmut-Schmidt-University Hamburg, Faculty of Economics & Social Sciences, Hamburg, Germany)

Abstract

Most central banks around the globe have the primary task to fight inflation. In the light of the fact that at least moderate inflation turns out to have little effect on the economy this is somewhat surprising. In order to understand why many countries have installed central banks which (almost exclusively) focus on fighting inflation it is necessary to understand why people care about inflation. However, comparatively little knowledge is yet available on the individual determinants of inflation aversion. Up to now, empirical (and quite inconclusive) evidence is available for a number of large Western democracies. Moreover, the evidence is mostly drawn from pure cross section data. Thus, it is yet unclear in how far the results depend on the prevailing macroeconomic situation and can be generalized. In this paper we study the individual determinants of inflation aversion in the Czech Republic. Using data from 11 waves of the Eurobarometer survey we find age, political orientation, education and the macroeconomic situation to have significant effects on the revealed preferences towards fighting inflation while income seems not to play a significant role.

Suggested Citation

  • Michael Berlemann, 2012. "Who Cares about Inflation? Empirical Evidence from the Czech Republic," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 6(3), pages 225-243, October.
    • Handle: RePEc:fau:aucocz:au2012_225
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    References listed on IDEAS

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    Cited by:

    1. Berlemann, Michael, 2014. "Inflation aversion in transition countries: Empirical evidence from the Baltic States," Economic Systems, Elsevier, vol. 38(3), pages 415-432.

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    More about this item

    Keywords

    Inflation; inflation aversion; preferences;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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