6533b86cfe1ef96bd12c8089

RESEARCH PRODUCT

Modelling the General Public's Inflation Expectations Using the Michigan Survey Data

Jani LuotoArto Luoma

subject

InflationEstimationEconomics and EconometricsActuarial sciencePopulation levelmedia_common.quotation_subjectEconomicsEconometricsSurvey data collectionVariance (accounting)Bayesian inferenceIndividual levelmedia_common

description

In this article we discuss a few models developed to explain the general public's inflation expectations formation and provide some relevant estimation results. Furthermore, we suggest a simple Bayesian learning model which could explain the expectations formation process on the individual level. When the model is aggregated to the population level it could explain not only the mean values, but also the variance of the public's inflation expectations. The estimation results of the mean and variance equations seem to be consistent with the results of the questionnaire studies in which the respondents were asked to report their thoughts and opinions about inflation.

yearjournalcountryeditionlanguage
2009-04-01
10.1080/00036840701604339http://www.ssoar.info/ssoar/handle/document/24049