{
  "title": "Inflation News and Euro Area Inflation Expectations",
  "publication": "IMF Working Papers, July 19, 2018",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2018/07/19/inflation-news-and-euro-area-inflation-expectations-45973",
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  "summary": "Do euro area inflation expectations remain well-anchored? This paper finds that the protracted period of low (and below-target) inflation in the euro area since 2013 has weakened their anchoring.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Research question: Do euro area inflation expectations remain well-anchored?\n- Key conclusion: The protracted period of low (and below-target) inflation in the euro area since 2013 has weakened the anchoring of inflation expectations.\n- Empirical advance: Results point to a significant impact of inflation news over recent years that had not been observed before in the euro area."
    },
    {
      "heading": "Methodology and Scope",
      "content": "- Data coverage: Analyzes all available (advanced) inflation releases.\n- Econometric approach:\n  - Tests sensitivity of expectations to inflation and macroeconomic news.\n  - Investigates reactions of expectations using daily, time-varying, and intraday frequency regressions to add robustness to conclusions."
    },
    {
      "heading": "Main Findings",
      "content": "- The anchoring of euro area inflation expectations weakened after a protracted period of low and below-target inflation since 2013.\n- Inflation news has a significant impact on euro area inflation expectations in recent years, a pattern not previously observed in the euro area literature.\n- Robustness checks performed through high-frequency (daily and intraday) and time-varying regressions support the main result."
    },
    {
      "heading": "Subject Areas and Keywords",
      "content": "- Subjects: Financial crises, Global financial crisis of 2008-2009, Inflation, National accounts, Prices, Return on investment\n- Keywords: flash estimate, Global, Global financial crisis of 2008-2009, inflation, inflation compensation, inflation expectation, inflation market, inflation news, inflation rate, macroeconomic news, market-based inflation expectations, monetary policy, Return on investment, swap market, swap rate, WP\n\n---\n\n Content in this bundle\n\n- Inflation News and Euro Area Inflation Expectations, WP/18/167, July 2018\n  - Inflation News and Euro Area Inflation Expectations, WP/18/167, July 2018 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Inflation News and Euro Area Inflation Expectations, WP/18/167, July 2018 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2018/07/19/inflation-news-and-euro-area-inflation-expectations-45973"
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    "Authors: Juan Angel Garcia, Sebastian Werner",
    "Published: July 19, 2018",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484363010.001",
    "Research question: Do euro area inflation expectations remain well-anchored?",
    "Key conclusion: The protracted period of low (and below-target) inflation in the euro area since 2013 has weakened the anchoring of inflation expectations.",
    "Empirical advance: Results point to a significant impact of inflation news over recent years that had not been observed before in the euro area.",
    "Data coverage: Analyzes all available (advanced) inflation releases.",
    "Econometric approach:",
    "The anchoring of euro area inflation expectations weakened after a protracted period of low and below-target inflation since 2013.",
    "Inflation news has a significant impact on euro area inflation expectations in recent years, a pattern not previously observed in the euro area literature.",
    "Robustness checks performed through high-frequency (daily and intraday) and time-varying regressions support the main result.",
    "Subjects: Financial crises, Global financial crisis of 2008-2009, Inflation, National accounts, Prices, Return on investment",
    "Keywords: flash estimate, Global, Global financial crisis of 2008-2009, inflation, inflation compensation, inflation expectation, inflation market, inflation news, inflation rate, macroeconomic news, market-based inflation expectations, monetary policy, Return on investment, swap market, swap rate, WP",
    "**Inflation News and Euro Area Inflation Expectations, WP/18/167, July 2018**"
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