Current Issues in Economics and Finance

Improving Survey Measures of Household Inflation Expectations

August/September 2010Volume 16, Number 7
JEL classification: C81, E31, E37, E64

Authors: Wändi Bruine de Bruin, Simon Potter, Robert Rich, Giorgio Topa, andWilbertvanderKlaauw

Expectations about future inflation are generally thought to play an important role in households’ decisions about spending and saving. They are also of great interest to central bankers, who take them into account when determining policy or assessing the effectiveness of communications with the public. To help improve existing survey measures of inflation expectations, the Federal Reserve Bank of New York recently joined with other institutions and academic consultants to develop a set of survey questions that will yield more reliable information on households’ inflation expectations, inflation uncertainty, and expectations about future wage changes.

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