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Expected Inflation (expected + inflation)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting75%

Selected Abstracts

Obstacles to disinflation: what is the role of fiscal expectations?

ECONOMIC POLICY, Issue 40 2004
Oya Celasun
SUMMARY Disinflation deficits Persistently high expected inflation often makes it difficult for policy-makers to recover from inflationary episodes without substantial output losses. Using survey data from eleven disinflation episodes, we can assess whether the more or less sluggish decline of inflation rates towards lower target levels is related to backward-looking pricing behavior or to imperfect credibility of the stabilization efforts. We find that expectations of future inflation play a much more important role than past inflation in shaping the inflation process. Second, we find that an improvement in various measures of fiscal balances significantly reduces inflation expectations. This evidence suggests that, when attempting to stabilize inflation, priority should be given to building fiscal credibility. , Oya Celasun, R. Gaston Gelos and Alessandro Prati [source]

Menu Costs, Nominal Wage Revisions, and Intracontract Wage Behavior

INDUSTRIAL RELATIONS, Issue 2 2002
Louis N. Christofides
We use data from indexed and nonindexed Canadian wage agreements to study the intracontract profile of nominal and real wages. Allowing for endogenous switching between the two indexation categories, we conclude that the number of nominal wage revisions depends on contract duration, expected inflation, and the cost of adjusting wages. Our results have implications for the menu cost, overlapping contracts, dynamic monopoly union, and efficient bargain literatures. [source]

The Asymmetric Impact of Inflation on Presidential Approval

POLITICS & POLICY, Issue 3 2002
Sungdai Cho
This article examines the impact of unexpected inflation on U.S. presidential approval levels for the period 1953,96. Unlike most previous considerations of economic expectations and presidential approval, we find clear evidence that unexpected inflation affects approval, but it does so in an asymmetric fashion. Higher than expected inflation has a negative impact on presidential approval, and VAR results indicate that the effects linger for more than two years. In contrast, lower than expected inflation has a negligible impact on presidential approval. [source]

Disinflation, Real Income Uncertainty and the Demand for Consumer Durables in a Mean,Variance Model of Portfolio Selection

THE MANCHESTER SCHOOL, Issue 2 2001
Jakob B. MadsenArticle first published online: 16 DEC 200
Survey evidence indicates that consumers only expect to be fractionally compensated by the real income reduction of inflation. Incorporating this evidence into a mean,variance model of portfolio selection, this paper shows that demand for durables is a negative function of expected inflation and income uncertainty. Using quarterly data for the USA and annual panel data for the OECD countries, empirical evidence shows that demand for durables is significantly adversely affected by inflation and income uncertainty, and that the recent disinflation has resulted in a significant increase in demand for durables. [source]