Understanding consumer inflation expectations during the COVID-19 pandemic

Vol: 
11/2022
Author name: 
Detmers GA
Ho S-J
Karagedikli O
Year: 
2022
Month: 
February
Abstract: 

We study how individuals’ formation of inflation expectations are affected by the stringent containment and economic support measures put in place during the Covid-19 pandemic. Using the New York Fed Survey of Consumer Expectations (SCE) and the Oxford Covid-19 Government Response Tracker (OxCGRT), we find that policies aimed to contain the pandemic lead to an increase in individuals’ inflation expectations and inflation uncertainty. We also find some heterogeneity in the impact across different demographic groups.

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