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The Inflation Expectations Of U.S. Firms: Evidence From A New Survey

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  • Gorodnichenko, Yuriy
  • Candia, Bernardo

Abstract

Introducing a new survey of U.S. firms’ inflation expectations, we document key stylized facts involving what U.S. firms know and expect about inflation and monetary policy. The resulting time series of firms’ inflation expectations displays unique dynamics, distinct from those of households and professional forecasters. By any typical definition of “anchored†expectations, the inflation expectations of U.S. managers appear far from anchored, much like those of households. And like households, U.S. managers are largely uninformed about recent aggregate inflation dynamics or monetary policy. These results complement existing evidence on firms’ inflation expectations from other countries and confirm that inattention to inflation and monetary policy is pervasive among U.S. firms as well.

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  • Gorodnichenko, Yuriy & Candia, Bernardo, 2021. "The Inflation Expectations Of U.S. Firms: Evidence From A New Survey," CEPR Discussion Papers 16161, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16161
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    More about this item

    Keywords

    Expectations; Surveys; Anchoring; Rational inattention; Managers;
    All these keywords.

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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