NY Fed – Nudging Inflation Expectations: An Experiment

by Sabrina I. Pacifici on November 5, 2012

Nudging Inflation Expectations: An Experiment – Basit Zafar, Olivier Armantier, Scott Nelson, Giorgio Topa, and Wilbert van der Klaauw

  • “Managing consumers’ inflation expectations is of critical importance to central banks in the conduct of monetary policy. But managing inflation expectations requires more than just monitoring expectations; it also requires an understanding of how these expectations are formed. In this post, we present results from a new study that investigates how individual consumers use selected information on food prices in forming their inflation expectations. While the provision of this information leads individuals to meaningfully revise expectations of their own-basket inflation rate, we find there is little impact on expectations of overall inflation.”
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