How to Limit the Spillover from the 2021 Inflation Surge to Inflation Expectations?

Research output: Working paperWorking papers

Standard

How to Limit the Spillover from the 2021 Inflation Surge to Inflation Expectations? / Dräger, Lena; Lamla, Michael J.; Pfajfar, Damjan.
Lüneburg: Institut für Volkswirtschaftslehre der Universität Lüneburg, 2022. (University of Lüneburg Working Paper Series in Economics; No. 407).

Research output: Working paperWorking papers

Harvard

Dräger, L, Lamla, MJ & Pfajfar, D 2022 'How to Limit the Spillover from the 2021 Inflation Surge to Inflation Expectations?' University of Lüneburg Working Paper Series in Economics, no. 407, Institut für Volkswirtschaftslehre der Universität Lüneburg, Lüneburg. <https://www.leuphana.de/fileadmin/user_upload/Forschungseinrichtungen/ifvwl/WorkingPapers/lue/pdf/wp_407_Upload.pdf>

APA

Dräger, L., Lamla, M. J., & Pfajfar, D. (2022). How to Limit the Spillover from the 2021 Inflation Surge to Inflation Expectations? (University of Lüneburg Working Paper Series in Economics; No. 407). Institut für Volkswirtschaftslehre der Universität Lüneburg. https://www.leuphana.de/fileadmin/user_upload/Forschungseinrichtungen/ifvwl/WorkingPapers/lue/pdf/wp_407_Upload.pdf

Vancouver

Dräger L, Lamla MJ, Pfajfar D. How to Limit the Spillover from the 2021 Inflation Surge to Inflation Expectations? Lüneburg: Institut für Volkswirtschaftslehre der Universität Lüneburg. 2022 Jan 25. (University of Lüneburg Working Paper Series in Economics; 407).

Bibtex

@techreport{b40b2af2d10343a7be24ce4c67599415,
title = "How to Limit the Spillover from the 2021 Inflation Surge to Inflation Expectations?",
abstract = "By providing numerical inflation projections. Many central banks currently face inflation well above their targets and with that the challenge to prevent spillovers on inflation expectations.We study the effect of different communication about the 2021 inflation surge on German consumers{\textquoteright} inflation expectations using a randomized control trial. We show that information about rising inflation increases short- and long-term inflation expectations. This initial increase in expectations can be mitigated using information about inflation projections, where numerical information about professional forecasters{\textquoteright} projections seems to reduce inflation expectations by more than policymaker{\textquoteright}s characterization of inflation as a temporary phenomenon.",
keywords = "Economics, Short-run and long-run inflation expectations, inflation surge, randomized control, survey experiment, persistent or transitory inflation shock",
author = "Lena Dr{\"a}ger and Lamla, {Michael J.} and Damjan Pfajfar",
year = "2022",
month = jan,
day = "25",
language = "English",
series = "University of L{\"u}neburg Working Paper Series in Economics",
publisher = "Institut f{\"u}r Volkswirtschaftslehre der Universit{\"a}t L{\"u}neburg",
number = "407",
type = "WorkingPaper",
institution = "Institut f{\"u}r Volkswirtschaftslehre der Universit{\"a}t L{\"u}neburg",

}

RIS

TY - UNPB

T1 - How to Limit the Spillover from the 2021 Inflation Surge to Inflation Expectations?

AU - Dräger, Lena

AU - Lamla, Michael J.

AU - Pfajfar, Damjan

PY - 2022/1/25

Y1 - 2022/1/25

N2 - By providing numerical inflation projections. Many central banks currently face inflation well above their targets and with that the challenge to prevent spillovers on inflation expectations.We study the effect of different communication about the 2021 inflation surge on German consumers’ inflation expectations using a randomized control trial. We show that information about rising inflation increases short- and long-term inflation expectations. This initial increase in expectations can be mitigated using information about inflation projections, where numerical information about professional forecasters’ projections seems to reduce inflation expectations by more than policymaker’s characterization of inflation as a temporary phenomenon.

AB - By providing numerical inflation projections. Many central banks currently face inflation well above their targets and with that the challenge to prevent spillovers on inflation expectations.We study the effect of different communication about the 2021 inflation surge on German consumers’ inflation expectations using a randomized control trial. We show that information about rising inflation increases short- and long-term inflation expectations. This initial increase in expectations can be mitigated using information about inflation projections, where numerical information about professional forecasters’ projections seems to reduce inflation expectations by more than policymaker’s characterization of inflation as a temporary phenomenon.

KW - Economics

KW - Short-run and long-run inflation expectations

KW - inflation surge

KW - randomized control

KW - survey experiment

KW - persistent or transitory inflation shock

M3 - Working papers

T3 - University of Lüneburg Working Paper Series in Economics

BT - How to Limit the Spillover from the 2021 Inflation Surge to Inflation Expectations?

PB - Institut für Volkswirtschaftslehre der Universität Lüneburg

CY - Lüneburg

ER -