Published in:CESifo Working Paper Series ; No. 7042
Extent:
1 Online-Ressource (30 p)
Language:
English
DOI:
10.2139/ssrn.3207182
Identifier:
Origination:
Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 15, 2018 erstellt
Description:
In this paper, we explore the degree of anchoring of consumers' individual long-run inflation expectations utilizing the University of Michigan Survey of Consumer's rotating panel micro-structure. Our results indicate that long-run inflation expectations became more anchored over the last decades, as the degree of co-movement between short- and long-run expectations fell significantly. While we observe that the anchoring of expectations increases for all age and birth cohorts, it seems that older cohorts, who experienced the high inflation period of the 1970s, remain less anchored in their long-run inflation expectations as compared to the young cohorts. Older cohorts show a higher volatility in their degree of anchoring and react more to adverse news shocks. This alludes to potentially long-lasting costs of high inflation spells