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Disagreement among Households May Foreshadow a Rise in Inflation Expectations

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  • Andrew Glover

Abstract

Households’ expectations about future inflation can influence realized inflation, so many policymakers track median household inflation expectations. However, the median changes slowly if households learn about economic fundamentals gradually. A widening distribution of household inflation expectations may foreshadow an increase in the median. During 2021, for example, disagreement about inflation expectations rose months before the median increased appreciably.

Suggested Citation

  • Andrew Glover, 2022. "Disagreement among Households May Foreshadow a Rise in Inflation Expectations," Economic Bulletin, Federal Reserve Bank of Kansas City, issue June 29, , pages 1-3, June.
    • Handle: RePEc:fip:fedkeb:94410
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    File URL: https://www.kansascityfed.org/Economic%20Bulletin/documents/8867/EconomicBulletin22Glover0629.pdf
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    References listed on IDEAS

    as
    1. N. Gregory Mankiw & Ricardo Reis, 2002. "Sticky Information versus Sticky Prices: A Proposal to Replace the New Keynesian Phillips Curve," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1295-1328.
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    Cited by:

    1. Jon Atwell & Marlon Twyman II, 2023. "Metawisdom of the Crowd: How Choice Within Aided Decision Making Can Make Crowd Wisdom Robust," Papers 2308.15451, arXiv.org.

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    More about this item

    Keywords

    Inflation; Households;

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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