Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/328248 
Year of Publication: 
2025
Series/Report no.: 
Deutsche Bundesbank Discussion Paper No. 25/2025
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
Economists widely rely on measures of inflation expectations and uncertainty elicited via density forecasts. This method, where respondents assign probabilities to pre-specified ranges, has been subjected to criticism particularly in the recent times of high and volatile inflation. We propose a new method to elicit the full distribution of inflation expectations, which is rooted in decision theory and can be implemented in standard surveys. In two large surveys and one laboratory experiment, we demonstrate that it leads to well-defined expectations that fulfil both subjective and objective quality criteria. The method is neither perceived as more difficult nor does it take more time to complete compared to the current standard. In contrast to density forecasts, the method is robust to differences in the state of the economy and thus allows comparisons across time and across countries. The method is portable and can be applied to elicit different macroeconomic expectations.
Subjects: 
Inflation expectations
measurement
macroeconomic beliefs
surveys
JEL: 
D84
E31
E37
E71
ISBN: 
978-3-98848-046-0
Document Type: 
Working Paper

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