First-order and higher-order inflation expectations: Evidence about households and firms

Pascal Kieren, Christian König-Kersting, Robert J. Schmidt, Stefan T. Trautmann and Franziska Theurich

No 18/2024, Discussion Papers from Deutsche Bundesbank

Abstract: We study first-order and higher-order inflation expectations of German households and firms elicited from surveys. The data allows to shed light on the relation between different orders of beliefs, and to derivate implications for noisy-information models with infinite regress. Moreover, since the elicited data is identical for households and firms, it also allows studying whether the relation between first-order and higher-order beliefs differs between the two samples. While we find that this relation is mostly identical between households and firms in our data, we identify differences to previously elicited data in the literature. We discuss potential sources for these differences and their theoretical implications.

Keywords: Inflation expectations; higher-order beliefs; noisy-information models; surveys (search for similar items in EconPapers)
JEL-codes: D84 E31 G17 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bubdps:299240

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