Anchoring Households' Inflation Expectations when Inflation is High
Autor: Giang Nghiem, Lena Dräger, Ami Dalloul
Nummer: 719, Oct 2024, pp. 65
JEL-Class: E52, E31, D84
Abstract:
This paper explores communication strategies for anchoring households' medium-term inflation expectations in a high inflation environment. We conducted a survey experiment with a representative sample of 4,000 German households at the height of the recent inflation surge in early 2023, with information treatments including a qualitative statement by the ECB president and quantitative information about the ECB's inflation target or projected inflation. Inflation projections are most effective, but combining information about the target with a qualitative statement also significantly improves anchoring. The treatment effects are particularly pronounced among respondents with high financial literacy and high trust in the central bank.
Zusammenfassung:
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