Disagreements in Consumer Inflation Expectations: Empirical Evidence for a Latin American Economy

Juan Camilo Anzoátegui-Zapata, Juan Camilo Galvis-Ciro

    Research output: Contribution to journalArticlepeer-review

    1 Scopus citations

    Abstract

    In this study, the Internet is considered an important source of information used by consumers to form inflation expectations. Based on this idea, this study investigates the effects of word searches related to the central bank, market basket, and living cost on disagreements in consumer expectations. The case of Colombia is analyzed because it is a small emerging economy under inflation targeting policy that conducts surveys to monitor consumer expectations. The methodology consists of using search volume indices on the Google Trends platform to identify effects on expectation disagreement. The econometric results of this study show that information found by consumers on Google can reduce disagreements in inflation expectations. Consequently, the main policy recommendation is that the Central Bank of Colombia should augment the communication it provides to the public through various digital platforms, as a method to anchor expectations.

    Original languageEnglish
    Pages (from-to)99-122
    Number of pages24
    JournalJournal of Business Cycle Research
    Volume16
    Issue number2
    DOIs
    StatePublished - Nov 2020

    Bibliographical note

    Publisher Copyright:
    © 2020, Springer Nature Switzerland AG.

    Keywords

    • Communication
    • Disagreements
    • Inflation expectations

    Fingerprint

    Dive into the research topics of 'Disagreements in Consumer Inflation Expectations: Empirical Evidence for a Latin American Economy'. Together they form a unique fingerprint.

    Cite this