TY  - BOOK
AU  - Coibion,Olivier
AU  - Gorodnichenko,Yuriy
AU  - Kumar,Saten
AU  - Pedemonte,Mathieu
ED  - National Bureau of Economic Research.
TI  - Inflation Expectations as a Policy Tool?
T2  - NBER working paper series
PY  - 2018///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - June 2018; Hardcopy version available to institutional subscribers
N2  - We assess whether central banks may use inflation expectations as a policy tool for stabilization purposes. We review recent work on how expectations of agents are formed and how they affect their economic decisions. Empirical evidence suggests that inflation expectations of households and firms affect their actions but the underlying mechanisms remain unclear, especially for firms. Two additional limitations prevent policy-makers from being able to actively manage inflation expectations. First, available surveys of firms' expectations are systematically deficient, which can only be addressed through the creation of large, nationally representative surveys of firms. Second, neither households' nor firms' expectations respond much to monetary policy announcements in low-inflation environments. We provide suggestions for how monetary policy-makers can pierce this veil of inattention through new communication strategies. At this stage, there remain a number of implementation issues and open research questions that need to be addressed to enable central banks to use inflation expectations as a policy tool
UR  - https://www.nber.org/papers/w24788
UR  - http://dx.doi.org/10.3386/w24788
ER  -