Journal Article

Whose Inflation Expectations Best Predict Inflation?


Abstract: We examine the predictive relationship between various measures of inflation expectations and future inflation. We find that the expectations of professional economists and of businesses have tended to provide more accurate predictions of future inflation than the expectations of households and of financial market participants. However, the forecasts coming from a relatively simple and popular benchmark inflation forecasting model have historically been roughly as accurate as the expectations of businesses and professional economists.

Keywords: inflation; measurement;

https://doi.org/10.26509/frbc-ec-202119

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Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Economic Commentary

Publication Date: 2021-10-18

Volume: 2021

Issue: 19

Pages: 7