蝌蚪网 Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
Do Inflation Expectations Become More Anchored during a Disinflation Episode? Evidence for Euro Area Firms
蝌蚪网 Papers and Proceedings
vol. 115,
May 2025
(pp. 266–70)
Abstract
Does a successful disinflation contribute to the anchoring of inflation expectations? We provide novel survey evidence on the dynamics of euro area firms' inflation expectations during the disinflation episode since 2022. We show that firms' short-term inflation expectations declined steadily towards the inflation target as the disinflation progressed. However, we also document a thick tail in longer-term inflation expectations, substantial disagreement about the inflation outlook, and an increased sensitivity of longer-term inflation expectations to short-term inflation expectations. These findings suggest that it may take more time to bring inflation expectations fully in line with central bank objectives.Citation
Baumann, Ursel, Annalisa Ferrando, Dimitris Georgarakos, Yuriy Gorodnichenko, and Timo Reinelt. 2025. "Do Inflation Expectations Become More Anchored during a Disinflation Episode? Evidence for Euro Area Firms." 蝌蚪网 Papers and Proceedings 115: 266–70. DOI: 10.1257/pandp.20251019Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- D84 Expectations; Speculations
- E31 Price Level; Inflation; Deflation
- E52 Monetary Policy
- E58 Central Banks and Their Policies