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Title:Inflation perceptions and expectations in Sweden: Are media reports the missing link? PDF Logo
Authors:Dräger, Lena
Issue Date:2011
Series/Report no.:KOF working papers // KOF Swiss Economic Institute, ETH Zurich 273
Abstract:Using quantitative survey data from the Swedish Consumer Tendency Survey as well as a unique data set on media reports about inflation, we analyze the formation process of inflation perceptions and expectations as well as interrelations between the variables. Throughout the analysis, the role of media reports about inflation is emphasized and results for the low inflation period January 1998 to December 2007 are compared to those including the high inflation year 2008. Rejecting rationality, we find that perceptions, but not expectations, are affected asymmetrically by news, where media effects are generally stronger in times of high and volatile inflation. For the low inflation sample period, inflation expectations are more affected by shocks to perceptions than vice versa, but Granger causality runs from expectations to perceptions. Including more volatile inflation, we find more feed-back between the variables and a strong media effect especially on perceptions.
Subjects:Inflation expectations
inflation perceptions
media reports
JEL:C32
E31
E37
Persistent Identifier of the first edition:doi:10.3929/ethz-a-006341668
Document Type:Working Paper
Appears in Collections:KOF Working Papers, KOF Konjunkturforschungsstelle, ETH Zürich

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