Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2021.1958245
How do firms form inflation expectations? Empirical evidence from the United States
Chi Zhang
Zhixin Liu
Yingying Xu
Yinpeng Zhang
Sažetak
Inflation expectations of firms affect their micro-decision-making
behaviors and therefore impact the macro-economy. Thus, a deep
understanding of how firms form inflation expectations benefits
the achievement of central bank’s policy objectives on macro-economic sustainability and development. In this paper, we focus on
the inflation expectations of firms from surveys. Specifically, the
Naïve Expectation, Adaptive Expectation, Rational Expectation,
VAR, and Heterogeneous Static Expectation formation models are
adopted to test the models being used by firms to form inflation
expectations. Empirically, this paper reveals the heterogeneity
between the formation mechanisms of households and firms.
Then, empirical results reject the rational expectation hypothesis
of firms’ inflation expectations, which means that they are not
perfectly rational. Finally, we find that the inflation perception is a
non-negligible factor in forming firms’ inflation expectations.
Therefore, central banks’ monetary policies that aiming to formulate firms’ inflation perceptions can be a useful tool in regulating
their inflation expectations, which are expected to benefit the stability of the macro-economy
Ključne riječi
Inflation expectations; firm; heterogeneity; inflation perception; monetary policy
Hrčak ID:
302037
URI
Datum izdavanja:
31.3.2023.
Posjeta: 194 *