Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/312570 
Year of Publication: 
2024
Series/Report no.: 
ZEW Discussion Papers No. 24-082
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
We study how households adjust their medium-term inflation expectations under the new ECB inflation targeting strategy. Survey respondents make little difference between the previous strategy of targeting inflation rates close to but below 2% and the new strategy with a 2% point target. Participants who learn about the inherent asymmetry in the ECB's reaction to potential off-target inflation expect moderately higher medium-term inflation. Respondents asked to assume a scenario of current inflation running below target place a significantly higher probability on medium-term outcomes above 2%. In a scenario of inflation currently running above target, however, participants do not in turn expect an undershooting of medium-term inflation.
Subjects: 
Monetary Policy Strategy
Household Inflation Expectations
Randomized Control Trial
Survey Data
JEL: 
F33
E31
E52
Document Type: 
Working Paper

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