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How Rational are the Expected Inflation Rate in Australia?

Author

Listed:
  • Paradiso, Antonio
  • Rao, B. Bhaskara

Abstract

This paper uses the methodology of Pearce (1979) and Bhagestani and Noori (2008) to show that the expected rate of inflation by the market participants in Australia is more rational than the household survey forecasts by the Melbourne Institute.

Suggested Citation

  • Paradiso, Antonio & Rao, B. Bhaskara, 2011. "How Rational are the Expected Inflation Rate in Australia?," MPRA Paper 28696, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:28696
    as

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    File URL: https://mpra.ub.uni-muenchen.de/28696/1/MPRA_paper_28696.pdf
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    References listed on IDEAS

    as
    1. Pearce, Douglas K, 1979. "Comparing Survey and Rational Measures of Expected Inflation: Forecast Performance and Interest Rate Effects," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 11(4), pages 447-456, November.
    2. Baghestani, Hamid & Noori, Esmail, 1988. "On the rationality of the Michigan monthly survey of inflationary expectations," Economics Letters, Elsevier, vol. 27(4), pages 333-335.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    ARIMA Forecasts; Expected Inflation Rate; Survey data; Australia.;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

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