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Discussion Paper
Evaluating Forecast Performance of Market-based Measures of Inflation Expectations in Europe
Predictions of future inflation rates shed light on the path of the economy and inform central banks’ policy rate decisions. Two commonly used sources of inflation forecasts are surveys and market-based inflation expectations. Survey-based inflation expectations, such as those from the Survey of Professional Forecasters, are derived by eliciting responses from a group of respondents about their beliefs.