Disagreement à la Taylor: Evidence from Survey Microdata

KOF Working Paper No. 380

24 Pages Posted: 25 Apr 2015

See all articles by Lena Dräger

Lena Dräger

Leibniz Universität Hannover

Michael J. Lamla

ETH Zurich - KOF Swiss Economic Institute; University of Essex

Date Written: April 24, 2015

Abstract

There is a growing interest in studying the disagreement of economic agents. Most studies, however, focus on the disagreement regarding one specific variable, hereby neglecting that disagreement may be co-moving with disagreement on other variables. In this paper we explore to which extent disagreement regarding the interest rate is driven by disagreement on inflation and on unemployment. This relationship can be motivated by the existence of the Taylor rule. Using micro survey data for both professional forecasters and consumers, we provide evidence that disagreement on the future interest rate is mainly driven by disagreement on inflation. Exploring further determinants, we confirm that central bank transparency as well as news on money and credit conditions significantly influence disagreement.

Keywords: Disagreement, Taylor rule, interest rate expectations, inflation expectations, unemployment expectations, microdata

JEL Classification: E31, E58, D84, C33

Suggested Citation

Dräger, Lena and Lamla, Michael J., Disagreement à la Taylor: Evidence from Survey Microdata (April 24, 2015). KOF Working Paper No. 380, Available at SSRN: https://ssrn.com/abstract=2598401 or http://dx.doi.org/10.2139/ssrn.2598401

Lena Dräger

Leibniz Universität Hannover ( email )

Königsworther Platz 1
Hannover, 30167
Germany

Michael J. Lamla (Contact Author)

ETH Zurich - KOF Swiss Economic Institute ( email )

Zurich
Switzerland

University of Essex ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

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