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New Facts about Firms' Inflation Expectations: Short- versus Long-Term Inflation Expectations

Author

Listed:
  • Yosuke Uno

    (Bank of Japan)

  • Saori Naganuma

    (Bank of Japan)

  • Naoko Hara

    (Bank of Japan)

Abstract

In this paper, using large-scale firm-level micro-data from the Tankan survey we examine firms' inflation expectations at different time horizons. Our principle findings are twofold. First, with regard to long-term expectations, a number of firms offer no forecasts. Second, and more importantly, the frequency of forecast revisions is higher for longer time horizons.

Suggested Citation

  • Yosuke Uno & Saori Naganuma & Naoko Hara, 2018. "New Facts about Firms' Inflation Expectations: Short- versus Long-Term Inflation Expectations," Bank of Japan Working Paper Series 18-E-15, Bank of Japan.
    • Handle: RePEc:boj:bojwps:wp18e15
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    References listed on IDEAS

    as
    1. Ricardo Reis, 2006. "Inattentive Producers," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(3), pages 793-821.
    2. Andrade, Philippe & Le Bihan, Hervé, 2013. "Inattentive professional forecasters," Journal of Monetary Economics, Elsevier, vol. 60(8), pages 967-982.
    3. 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.
    4. Saten Kumar & Hassan Afrouzi & Olivier Coibion & Yuriy Gorodnichenko, 2015. "Inflation Targeting Does Not Anchor Inflation Expectations: Evidence from Firms in New Zealand," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(2 (Fall)), pages 151-225.
    5. Masazumi Hattori & Steven Kong & Frank Packer & Toshitaka Sekine, 2016. "The effects of a central bank's inflation forecasts on private sector forecasts: Recent evidence from Japan," BIS Working Papers 585, Bank for International Settlements.
    6. Fujiwara, Ippei, 2005. "Is the central bank's publication of economic forecasts influential?," Economics Letters, Elsevier, vol. 89(3), pages 255-261, December.
    7. Yosuke Uno & Saori Naganuma & Naoko Hara, 2018. "New Facts about Firms' Inflation Expectations: Simple Tests for a Sticky Information Model," Bank of Japan Working Paper Series 18-E-14, Bank of Japan.
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    Cited by:

    1. Shuichiro Ikeda & Haruhiko Inatsugu & Yui Kishaba & Takuji Kondo & Kenichi Sakura & Kosuke Takatomi & Takashi Nakazawa & Kotone Yamada, "undated". "Inflation in Japan: Changes during the Pandemic and Issues for the Future," Bank of Japan Working Paper Series 22-E-18, Bank of Japan.
    2. Jouchi Nakajima & Hiroaki Yamagata & Tatsushi Okuda & Shinnosuke Katsuki & Takeshi Shinohara, 2021. "Extracting Firms' Short-Term Inflation Expectations from the Economy Watchers Survey Using Text Analysis," Bank of Japan Working Paper Series 21-E-12, Bank of Japan.
    3. Yosuke Uno & Saori Naganuma & Naoko Hara, 2018. "New Facts about Firms' Inflation Expectations: Simple Tests for a Sticky Information Model," Bank of Japan Working Paper Series 18-E-14, Bank of Japan.

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    More about this item

    Keywords

    long-term inflation expectations; frequency of forecast revisions;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • 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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