Venue: ESRI, Whitaker Square, Sir John Rogerson’s Quay, Dublin 2.
Date: Thursday 27/10/2011.
Time: 4.00 pm.
Speaker: Petra Gerlach-Kristen, ESRI.
If a central bank’s promise to keep inflation stable is credible, long-run inflation expectations should not respond to economic news. This paper studies market participants’ inflation expectations in the euro area, the United Kingdom and the United States as implied by inflation swaps. We find that inflation expectations up to ten years out seem to respond to commodity prices and unemployment news and that some of these reactions have apparently become stronger and longer-lasting since the onset of the global financial crisis. This might be due to second-round effects and thus to a decrease in central banks’ credibility.
One reply on “ESRI Research Seminar: Inflation Expectations, Central Bank Credibility and the Global Financial Crisis”
If we are to believe George Soros we have to believe that existing macroeconomic models are of little use as forecasting tools. So scepticism abounds.
In this video they are soliciting participants for INET.
http://ineteconomics.org/video/documentary/george-soros-talks-rob-johnson-about-inet