The Role of Dispersed Information in Inflation and Inflation Expectations

2020 ◽  
Author(s):  
Zhao Han ◽  
Xiaohan Ma ◽  
Ruoyun Mao
Keyword(s):  
Inflation Expectations ◽  
Dispersed Information

Monetary Policy Committees and Central Bank Communication

2020 ◽  
pp. 19-44
Author(s):  
Nicole Baerg
Keyword(s):  
Central Bank ◽  
Size Composition ◽  
Central Banks ◽  
Empirical Literature ◽  
Inflation Expectations ◽  
Policy Changes ◽  
Central Bank Communication ◽  
Central Bank Transparency ◽  
Key Policy

This chapter starts by tracing trends in central bank transparency. It reports key policy changes by some of the world’s most important central banks: the FOMC, the European Central Bank, the Bank of England, and the Bank of Japan. The second section reviews the theoretical and empirical literature on central bank design, paying close attention to the role of committee size, composition, and decision-making protocol, and classifies central banks around the world according to these features. The third section outlines the aim of central bank communications: to broadcast news and to reduce noise. The author argues that while previous literature has examined both committee design and central bank communications, it has done so in isolation. By putting these two topics together, the chapter argues that we can better understand, first, how different types of committees may be better at communicating and, second, how communication affects households’ inflation expectations and inflation.

scholarly journals Empirical Evidence on Inflation Expectations in the New Keynesian Phillips Curve

2014 ◽  
Vol 52 (1) ◽  
pp. 124-188 ◽  
Author(s):  
Sophocles Mavroeidis ◽  
Mikkel Plagborg-Møller ◽  
James H. Stock
Keyword(s):  
Empirical Evidence ◽  
Phillips Curve ◽  
New Keynesian ◽  
Inflation Expectations ◽  
Clear Understanding ◽  
New Keynesian Phillips Curve ◽  
Limited Information ◽  
Weak Identification ◽  
Point Estimates

We review the main identification strategies and empirical evidence on the role of expectations in the New Keynesian Phillips curve, paying particular attention to the issue of weak identification. Our goal is to provide a clear understanding of the role of expectations that integrates across the different papers and specifications in the literature. We discuss the properties of the various limited-information econometric methods used in the literature and provide explanations of why they produce conflicting results. Using a common dataset and a flexible empirical approach, we find that researchers are faced with substantial specification uncertainty, as different combinations of various a priori reasonable specification choices give rise to a vast set of point estimates. Moreover, given a specification, estimation is subject to considerable sampling uncertainty due to weak identification. We highlight the assumptions that seem to matter most for identification and the configuration of point estimates. We conclude that the literature has reached a limit on how much can be learned about the New Keynesian Phillips curve from aggregate macroeconomic time series. New identification approaches and new datasets are needed to reach an empirical consensus. (JEL C51, D84, E12, E24, E31)

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