scholarly journals Interventions and Inflation Expectations in an Inflation Targeting Economy

2013 ◽  
Author(s):  
Pablo M. Pincheira
Keyword(s):  
Inflation Targeting ◽  
Inflation Expectations

scholarly journals Inflation Expectations in Turkey: Determinants and Roles in Missing Inflation Targets

2018 ◽  
Vol 7 (3) ◽  
pp. 73-90 ◽  
Author(s):  
Umit Bulut
Keyword(s):  
Exchange Rate ◽  
Inflation Targeting ◽  
Inflation Rate ◽  
Oil Price ◽  
Output Gap ◽  
Inflation Expectations ◽  
Inflation Target ◽  
Distributed Lag ◽  
Expected Inflation ◽  
Target Output

Abstract This paper aims at specifying the determinants of 12-month ahead and 24-month ahead inflation expectations in Turkey by using monthly data from April 2006 to December 2016. Put differently, this paper tries to shed light on how inflation expectations respond to changes in past inflation rate, inflation target, output gap, USD/TL exchange rate, oil price, and EMBI in Turkey. To this end, the paper first conducts unit root tests in order to detect the order of integration of the variables. Then, the paper employs the autoregressive distributed lag approach to examine whether there is a cointegration relationship among variables and to estimate long-run parameters. According to the findings, 12-month ahead expected inflation rate is positively related to past inflation rate, inflation target, output gap, USD/TL exchange rate, and oil price and is negatively related to EMBI. Besides, 24-month ahead expected inflation rate is positively related to past inflation rate and USD/TL exchange rate and is negatively related to inflation target and EMBI. Upon its findings, the paper makes some inferences about the success of inflation targeting strategy in Turkey.

scholarly journals Inflation Targeting Does Not Anchor Inflation Expectations: Evidence from Firms in New Zealand

2015 ◽  
Author(s):  
Saten Kumar ◽  
Hassan Afrouzi ◽  
Olivier Coibion ◽  
Yuriy Gorodnichenko
Keyword(s):  
New Zealand ◽  
Inflation Targeting ◽  
Inflation Expectations

Inflation targeting and inflation expectations in Mexico

2012 ◽  
Vol 45 (23) ◽  
pp. 3295-3304 ◽  
Author(s):  
Carlos A. Carrasco ◽  
Jesus Ferreiro
Keyword(s):  
Inflation Targeting ◽  
Inflation Expectations

scholarly journals Development of Inflation Expectations in Serbia and a Comparative Analysis

2020 ◽  
Vol 9 (1) ◽  
pp. 61-79
Author(s):  
Vesna Martin
Keyword(s):  
Comparative Analysis ◽  
Trade Unions ◽  
Inflation Targeting ◽  
Inflation Expectations ◽  
Economic Agents ◽  
Inflation Expectation ◽  
Floating Exchange Rate ◽  
National Bank ◽  
Targeting Strategy

AbstractInflation expectations are very important when it comes to monetary policy and its decisions. In countries which are applying inflation targeting, inflation expectations reflect prediction of economic agents of movement of inflation rate in mid and long term. Anchored inflation expectations and their movements within target tolerance band are pointing to effectiveness of the inflation targeting strategy. Consistent with the best international practice, after introducing the inflation targeting regime in January 2009, the National Bank of Serbia began monitoring and analysing inflation expectations of economic agents (financial sector, corporate sector, trade unions, and households). The aim of this paper is to analyse inflation expectations in Serbia, but also to give a comparative analysis of inflation expectation of other countries which are using inflation targeting and floating exchange rate, as is the case of the National Bank of Serbia.

scholarly journals The Analysis of Monetary Transmission Mechaniscm by Expectation Patterns in Influencing the Inflation

2018 ◽  
Vol 6 (4) ◽  
pp. 412-419
Author(s):  
Ilma Ulfatul
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Inflation Targeting ◽  
Transmission Mechanism ◽  
Output Gap ◽  
Inflation Expectations ◽  
Short Term ◽  
Inflation Expectation ◽  
Policy Transmission ◽  
Monetary Policy Transmission Mechanism

Bank Indonesia set inflation targeting framework from 1 July 2005 by publicizing the inflation target or forward inflation to the public. However, the phenomenon show that most of the actual inflation of Indonesia is not in accordance with inflation targeting that have been set by Bank Indonesia. The purpose of this research is to analyze and know the flow of monetary policy transmission mechanism of expectation line in influencing inflation, to analyze and to know the influence of long-term and short-term and the shocks of interest rate, exchange rate, inflation expectations, output gap and GDP on inflation in Indonesia. The variables used in this research are BI Rate, Exchange Rate, Inflation Expectation, Output Gap, GDP and Inflation. The data used in this research is monthly data of time series from January 2006 until June 2016 which come from Bank Indonesia (BI) and Central Statistic Agency (BPS). The method used in this research is Vector Error Correction Model (VECM). The result of research indicates that: The flow of monetary policy transmission mechanism of expectation line in influencing inflation in Indonesia runs continuously with indicated the existence of two-way relationship between exchange rate and inflation variable, in the short term, the BI Rate, Exchange Rate and Output Gap are significant and positively affect inflation, inflation expectation variables are significant and affect inflation and GDP variable is insignificant to inflation in Indonesia, while in long run variable affecting inflation rate are BI Rate and inflation expectations, based on the variance decomposits result shows that the biggest variant contributing to inflation in Indonesia is the BI Rate.

scholarly journals Does Inflation Targeting Anchor Long-Run Inflation Expectations? Evidence from Long-Term Bond Yields in the U.S., U.K., and Sweden

2006 ◽  
pp. 1.000-51.000 ◽  
Author(s):  
Refet S. Gürkaynak ◽  
◽  
Andrew T. Levin ◽  
Eric T. Swanson ◽  
◽  
...  
Keyword(s):  
Inflation Targeting ◽  
Inflation Expectations ◽  
Bond Yields ◽  
Long Run ◽  
The U.S

scholarly journals Nonlinearities and asymmetric adjustment to PPP in an exchange rate model with inflation expectations

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Christina Anderl ◽  
Guglielmo Maria Caporale
Keyword(s):  
Exchange Rate ◽  
Purchasing Power Parity ◽  
Inflation Targeting ◽  
Real Exchange Rates ◽  
Policy Implications ◽  
Inflation Expectations ◽  
Ardl Model ◽  
Content Type ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag

PurposeThis paper aims to explain real exchange rate fluctuations by means of a model including both standard fundamentals and two alternative measures of inflation expectations for five inflation targeting countries (the UK, Canada, Australia, New Zealand and Sweden) over the period January 1993–July 2019.Design/methodology/approachBoth a benchmark linear autoregressive distributed lag (ARDL) model and a nonlinear autoregressive distributed lag (NARDL) specification are considered.FindingsThe results suggest that the nonlinear framework is more appropriate to capture the behaviour of real exchange rates given the presence of asymmetries both in the long and short run. In particular, the speed of adjustment towards the purchasing power parity (PPP) implied long-run equilibrium is three times faster in a nonlinear framework, which provides much stronger evidence in support of PPP. Moreover, inflation expectations play an important role, with survey-based ones having a more sizable effect than market-based ones.Originality/valueThe focus on linearities and the estimation of a NARDL model, which is shown to outperform the linear ARDL model both within sample and out of sample, is an important contribution to the existing literature which has rarely applied this type of framework; the choice of an appropriate econometric method also makes the policy implications of the analysis more reliable; in particular, monetary authorities should aim to achieve a high degree of credibility to manage them and thus currency fluctuations effectively; the inflation targeting framework might be especially appropriate for this purpose.

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