Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73072
Authors: 
Lamla, Michael J.
Sarferaz, Samad
Year of Publication: 
2012
Series/Report no.: 
Joint Discussion Paper Series in Economics 16-2012
Abstract: 
This paper investigates how inflation expectations evolve. In particular, we analyze the time-varying nature of the propensity to update expectations and its potential determinants. For this purpose we set up a flexible econometric model that tracks the formation of inflation expectations of consumers at each moment in time. We show that the propensity to update inflation expectations changes substantially over time and is related to the quantity and the quality of news.
Subjects: 
inflation expectation formation
time-varying parameters
Bayesian methods
disagreement
media coverage
stochastic volatility
JEL: 
E31
E37
E52
D83
Document Type: 
Working Paper

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