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What Influences Consumer Inflation Expectations?

Lookup NU author(s): Dr Robert AndersonORCiD



This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License (CC BY-NC 4.0).


Using data from the Michigan survey, this paper empirically analyses the differing influences on inflation expectations over sub-groups of US consumers, defined by gender, age and income. We find little support for the hypothesis that the differences are associated with inflation experience, as represented by the expenditure patterns of these groups, and strong evidence of differing responses to economic news. While negative inflation news leads to significantly higher expectations across all groups, heterogenous responses are evident to other types of news (particularly that related to employment), with positive news often unimportant. A common finding across all sub-groups is that the housing inflation differential compared with overall CPI plays a negative role for expectations, which may be associated with the measurement of this component in the CPI.

Publication metadata

Author(s): Anderson RDJ, Becker R, Osborn DR

Publication type: Conference Proceedings (inc. Abstract)

Publication status: Published

Conference Name: Money Macro and Finance Research Group 46th Annual Conference

Year of Conference: 2014

Online publication date: 19/09/2014

Acceptance date: 30/05/2014

Date deposited: 05/09/2017

Publisher: The Money Macro and Finance Research Group