The role of expectations and output in the inflation process: an empirical assessment

Abstract: This brief examines two issues of current interest concerning inflation: (1) whether \\"well-anchored\\" expectations will help to restrain inflation's decline and whether an \\"un-anchoring\\" of expectations could lead to undesirably high inflation and (2) to what extent output (or utilization) gaps are useful components of empirical models of inflation and, if they are useful, to what extent current gaps might counterbalance the effect of expectations on inflation. The goals of conducting this examination are to articulate a reasonably coherent framework for the discussion, highlight the key areas of uncertainty, and provide new empirical evidence that sheds some light on these areas.

Keywords: Inflation (Finance);

Access Documents

File(s): File format is application/pdf


Bibliographic Information

Provider: Federal Reserve Bank of Boston

Part of Series: Public Policy Brief

Publication Date: 2010

Order Number: 10-2