We host different speakers at our Economic Theory & Policy Seminar. 

Upcoming topics and speakers will be posted below.

23. October 2023, 16:00 until 17:30

Theory & Policy Seminar / Michal Marencak (National Bank of Slovakia) / Inflation Expectations at Times of High and Low Inflation

Seminar

"Inflation Expectations at Times of High and Low Inflation"

Michal Marencak, opens an external URL in a new window (National Bank of Slovakia)

This paper presents two novel findings on household inflation expectations during periods of high and low inflation. First, the impact of inflation expectations on durable consumption varies over time and depends on the expected inflation regime. Anticipating rising inflation relative to positive inflation enhances the readiness to spend on durables during periods of surging inflation but not during deflationary times. Moreover, the absence of explicit inflation expectations reduces consumption propensity, particularly during times of surging inflation. Second, outside the stable inflation range (2-3%), individual expected inflation levels drive the variance of aggregate inflation expectations (intensive margin). However, it isthe anticipation of higher or positive inflation (extensive margin) that influences the willingness to consume. These findings suggest regime- and agent-specific Euler equations.

Calendar entry

Event location

TU Wien
1040 Vienna
Wiedner Hauptstr. 8-10, Freihaus - Seminarroom DB04, yellow area, 4th floor

 

Organiser

ECON
Julia Hutter
julia.hutter@tuwien.ac.at

 

Public

Yes

 

Entrance fee

No

 

Registration required

No

Theory & Policy Seminar / Michal Marencak (National Bank of Slovakia) / Inflation Expectations at Times of High and Low Inflation

"Inflation Expectations at Times of High and Low Inflation"

Michal Marencak, opens an external URL in a new window (National Bank of Slovakia)

This paper presents two novel findings on household inflation expectations during periods of high and low inflation. First, the impact of inflation expectations on durable consumption varies over time and depends on the expected inflation regime. Anticipating rising inflation relative to positive inflation enhances the readiness to spend on durables during periods of surging inflation but not during deflationary times. Moreover, the absence of explicit inflation expectations reduces consumption propensity, particularly during times of surging inflation. Second, outside the stable inflation range (2-3%), individual expected inflation levels drive the variance of aggregate inflation expectations (intensive margin). However, it isthe anticipation of higher or positive inflation (extensive margin) that influences the willingness to consume. These findings suggest regime- and agent-specific Euler equations.