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A choice-based approach to the measurement of inflation expectations

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In macroeconomic surveys, inflation expectations are commonly elicited via density forecasts in which respondents assign probabilities to pre-specified ranges in inflation. This question format is increasingly subject to criticism. In this study, we propose a new method to elicit inflation expectati...

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Bibliographic Details
Main Authors: Goldfayn-Frank, Olga (Author) , Kieren, Pascal (Author) , Trautmann, Stefan T. (Author)
Format: Book/Monograph Working Paper
Language:English
Published: Heidelberg Universitätsbibliothek Heidelberg 14 Feb. 2024
Series:AWI discussion paper series no. 742 (January 2024)
In: AWI discussion paper series (no. 742 (January 2024))

DOI:10.11588/heidok.00034429
Subjects:
Graue Literatur
Online Access:Resolving-System, kostenfrei: https://nbn-resolving.de/urn:nbn:de:bsz:16-heidok-344290
Resolving-System, kostenfrei: https://doi.org/10.11588/heidok.00034429
Verlag, kostenfrei, Volltext: http://www.ub.uni-heidelberg.de/archiv/34429
Verlag, kostenfrei: https://archiv.ub.uni-heidelberg.de/volltextserver/34429/7/choice-based_approach_dp742_2024.pdf
Resolving-System, kostenfrei: https://nbn-resolving.org/urn:nbn:de:bsz:16-heidok-344290
Langzeitarchivierung Nationalbibliothek, kostenfrei: https://d-nb.info/1319427960/34
Resolving-System, kostenfrei: https://hdl.handle.net/10419/286381
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Author Notes:Olga Goldfayn-Frank, Pascal Kieren, Stefan Trautmann
Description
Summary:In macroeconomic surveys, inflation expectations are commonly elicited via density forecasts in which respondents assign probabilities to pre-specified ranges in inflation. This question format is increasingly subject to criticism. In this study, we propose a new method to elicit inflation expectations which is based on prior decision theoretic research. We demonstrate that it leads to well-defined expectations with central tendencies close to the corresponding point forecasts and to lower forecast uncertainty than density forecasts. In contrast to currently employed methods, the approach is robust to differences in the state of the economy and thus allows comparisons across time and across countries. Additionally, the method is not very time consuming and portable in the sense that it can be applied to different macroeconomic measures.
Physical Description:Online Resource
DOI:10.11588/heidok.00034429

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