Abstract

https://ssrn.com/abstract=2848044
 


 



Inflation Expectations, Disagreement, and Monetary Policy


Mathias Hoffmann


Deutsche Bundesbank

Patrick Hürtgen


Deutsche Bundesbank - Economic Research Centre

2016

Bundesbank Discussion Paper No. 31/2016

Abstract:     
Survey data on inflation expectations show that: (i) private sector forecasts and central bank forecasts are not fully aligned and (ii) private sector forecasters disagree about inflation expectations. To reconcile these two facts we introduce dispersed information in a New Keynesian model, where as a result, inflation expectations differ between the private sector and the central bank. We show that output and inflation responses change markedly when the central bank responds to private sector inflation expectations rather than to their own.

Number of Pages in PDF File: 30

Keywords: business cycles, survey data, learning, disagreement, monetary policy

JEL Classification: E52, E31, D83


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Date posted: October 5, 2016  

Suggested Citation

Hoffmann, Mathias and Hürtgen, Patrick, Inflation Expectations, Disagreement, and Monetary Policy (2016). Bundesbank Discussion Paper No. 31/2016. Available at SSRN: https://ssrn.com/abstract=2848044

Contact Information

Mathias Hoffmann (Contact Author)
Deutsche Bundesbank ( email )
Wilhelm-Epstein-Str. 14
D-60431 Frankfurt/Main
Germany
Patrick Hürtgen
Deutsche Bundesbank - Economic Research Centre ( email )
Wilhelm-Epstein-Strasse 14
Frankfurt/Main D-60431
Germany
HOME PAGE: http://https://sites.google.com/site/patrickhuertgen/
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