Disagreement about inflation expectations: The case of Japanese households
Shusaku Nishiguchi, Jouchi Nakajima, Kei Imakubo 02 May 2014
Inflation expectations are not fully captured with a single number. One important aspect is the degree of "disagreement" or "dispersion" in such expectations. This column discusses how the distribution of Japanese households' medium-horizon inflation expectations evolved using survey data. As prices have been rising since 2013, the expectations distribution showed a decrease in respondents expecting deflation or high inflation, and there was a substantial increase in respondents expecting moderate inflation.
It is well known that inflation expectations vary across agents. Nevertheless, this fact has attracted little attention. Analysis of inflation expectations typically tend to focus on measures such as the mean and the median of such expectations. One of the distinguished exceptions is Mankiw et al. (2003), who discuss in a context of sticky information how the disagreement in US households' inflation expectations was evolving through the Volcker disinflation. Our recent research (Nishiguchi et al. 2014) has brought the disagreement issue once again to the fore.
inflation, Japan, inflation expectations
Are the golden years of central banking over?
Stefan Gerlach, Alberto Giovannini, Cédric Tille 17 July 2009
What lessons should central bankers take away from the financial crisis? This column summarises concerns about macro-prudential regulation, inflation expectations, and the interaction between monetary policy and financial regulation
Central banks have responded decisively to the ongoing financial and economic crisis by intervening forcefully and in innovative ways to support the financial system and the economy. In a report published today, we review the background and evolution of the crisis, focusing on what lessons central banks should draw (Gerlach, Giovannini, Tille, and Viñals 2009).
Global crisis Monetary policy
macro-prudential regulation, inflation expectations