Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/323949 
Year of Publication: 
2025
Series/Report no.: 
Technical Paper No. 02/2025
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
We propose novel measures to evaluate the risk profile of longer-term inflation expectations, using data on inflation probabilities from the ECB's Survey of Professional Forecasters (SPF). Unlike existing indicators, these measures specifically incorporate the central bank's inflation target. This allows for a more precise assessment of forecasters' perceptions of risks to the central bank's ability to achieve its target. Consequently, these measures provide a valuable additional criterion for assessing the degree of expectation anchoring. In contrast to other metrics, our measures indicate that, between 2014 and 2017 as well as during the Covid-19 crisis, professional forecasters saw the risk that inflation could undershoot the target in the longer term. Moreover, our indicators suggest that, following Russia's invasion of Ukraine, survey participants perceived a risk of inflation overshooting the target four to five years ahead.
Subjects: 
Inflation
Expectations
Monetary Policy
Survey of Professional Forecasters
JEL: 
E31
E58
Document Type: 
Working Paper

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