Inflation Expectations and Climate Concern

38 Pages Posted: 27 Apr 2022

See all articles by Christoph Meinerding

Christoph Meinerding

Deutsche Bundesbank

Andrea Poinelli

European Central Bank (ECB)

Yves S. Schüler

Deutsche Bundesbank

Date Written: 2022

Abstract

Using survey data from German households, we find that individuals with lower climate concern tend to have higher inflation expectations up to five years ahead. This correlation is most pronounced among individuals with extremely high inflation expectations. Evaluating candidate explanations, we find that part of the link between climate concern and inflation expectations can be associated with individuals' perceived exposures to climate-related risks and with their distrust in the central bank. Overall, our results suggest that climate change perceptions matter for inflation expectations.

Keywords: climate change, inflation expectations, physical risk, transition risk, central bank distrust, household surveys

JEL Classification: E31, E50, Q54, Q58

Suggested Citation

Meinerding, Christoph and Poinelli, Andrea and Schüler, Yves S., Inflation Expectations and Climate Concern (2022). Deutsche Bundesbank Discussion Paper No. 12/2022, Available at SSRN: https://ssrn.com/abstract=4094559 or http://dx.doi.org/10.2139/ssrn.4094559

Christoph Meinerding (Contact Author)

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

Andrea Poinelli

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Yves S. Schüler

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

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