Details
| Original language | English |
|---|---|
| Pages (from-to) | 427-451 |
| Number of pages | 25 |
| Journal | Journal of Economic Surveys |
| Volume | 38 |
| Issue number | 2 |
| Publication status | Published - 7 Mar 2024 |
Abstract
After the financial crisis of 2008, central banks around the world have increased their communication efforts to reach consumers, with the aim of both guiding and anchoring their inflation expectations. For the expectations channel of monetary policy to work as intended, central banks need a thorough understanding of the formation process of expectations by the general public and of the relationship between expectations and economic choices. This warrants reliable and detailed data on consumers' expectations of macroeconomic variables such as inflation or interest rates. We, thus, survey the available survey data and issues regarding the measurement of macroeconomic expectations. Furthermore, we discuss the research frontier on important aspects of the expectations channel: We evaluate the evidence on whether expectations are formed consistently with standard macroeconomic relationships, discuss the insights with respect to the anchoring of inflation expectations, explore the role of narratives and preferences and lastly, we survey the research on causal effects of central bank communication on expectations and economic choices.
Keywords
- central bank communication, consumers' macroeconomic expectations, survey data
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
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In: Journal of Economic Surveys, Vol. 38, No. 2, 07.03.2024, p. 427-451.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Consumers' macroeconomic expectations
AU - Dräger, Lena
AU - Lamla, Michael J.
N1 - Funding Information: We thank the editor and four referees for substantially improving the paper with their comments and suggestions. Open access funding enabled and organized by Projekt DEAL.
PY - 2024/3/7
Y1 - 2024/3/7
N2 - After the financial crisis of 2008, central banks around the world have increased their communication efforts to reach consumers, with the aim of both guiding and anchoring their inflation expectations. For the expectations channel of monetary policy to work as intended, central banks need a thorough understanding of the formation process of expectations by the general public and of the relationship between expectations and economic choices. This warrants reliable and detailed data on consumers' expectations of macroeconomic variables such as inflation or interest rates. We, thus, survey the available survey data and issues regarding the measurement of macroeconomic expectations. Furthermore, we discuss the research frontier on important aspects of the expectations channel: We evaluate the evidence on whether expectations are formed consistently with standard macroeconomic relationships, discuss the insights with respect to the anchoring of inflation expectations, explore the role of narratives and preferences and lastly, we survey the research on causal effects of central bank communication on expectations and economic choices.
AB - After the financial crisis of 2008, central banks around the world have increased their communication efforts to reach consumers, with the aim of both guiding and anchoring their inflation expectations. For the expectations channel of monetary policy to work as intended, central banks need a thorough understanding of the formation process of expectations by the general public and of the relationship between expectations and economic choices. This warrants reliable and detailed data on consumers' expectations of macroeconomic variables such as inflation or interest rates. We, thus, survey the available survey data and issues regarding the measurement of macroeconomic expectations. Furthermore, we discuss the research frontier on important aspects of the expectations channel: We evaluate the evidence on whether expectations are formed consistently with standard macroeconomic relationships, discuss the insights with respect to the anchoring of inflation expectations, explore the role of narratives and preferences and lastly, we survey the research on causal effects of central bank communication on expectations and economic choices.
KW - central bank communication
KW - consumers' macroeconomic expectations
KW - survey data
UR - http://www.scopus.com/inward/record.url?scp=85174603869&partnerID=8YFLogxK
U2 - 10.1111/joes.12590
DO - 10.1111/joes.12590
M3 - Article
AN - SCOPUS:85174603869
VL - 38
SP - 427
EP - 451
JO - Journal of Economic Surveys
JF - Journal of Economic Surveys
SN - 0950-0804
IS - 2
ER -