Whose Inflation Expectations Best Predict Inflation?
Year: 2021
Type: article
Abstract: We examine the predictive relationship between various measures of inflation expectations and future inflation. We find that the expectations of professional economists and of businesses have tended to provide more accurate predictions of future inflation than the expectations of households and of financial market participants. However, the forecasts coming from a relatively simple and popular benchmark inflation forecasting model have historically been roughly as accurate as the expectations of businesses and professional economists.
Authors: Randal J. Verbrugge, Saeed Zaman
Institution: Federal Reserve Bank of Cleveland
Language: English
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W3206209686