Inflation Expectations
Inflation expectations refer to the anticipated rate of inflation in the future. It is an important concept in economics and finance, as it affects the decisions of consumers, businesses, and investors. Inflation expectations are based on a variety of factors, including the current rate of inflation, economic growth, and the monetary policies of central banks. Inflation expectations can be measured through surveys, market-based indicators, and economic models.
History of Inflation Expectations
Inflation expectations have been studied since the early 20th century. In the 1920s, economist Irving Fisher developed the concept of the “expectations theory of inflation”, which states that inflation is determined by the expectations of economic agents. This theory has been widely accepted by economists and is still used today. In the 1950s, economist Milton Friedman developed the “natural rate of unemployment”, which states that the rate of inflation is determined by the rate of unemployment. This theory has also been widely accepted by economists and is still used today.
In the 1970s, economists began to focus on the role of expectations in determining inflation. This led to the development of the “rational expectations theory”, which states that economic agents form their expectations based on their past experiences and the available information. This theory has been widely accepted by economists and is still used today.
Table of Comparisons
| Inflation Expectations | Current Rate of Inflation | Economic Growth | Monetary Policies |
|---|---|---|---|
| Anticipated rate of inflation in the future | Determined by current rate of inflation | Affected by economic growth | Affected by central bank policies |
Summary
Inflation expectations refer to the anticipated rate of inflation in the future. It is an important concept in economics and finance, as it affects the decisions of consumers, businesses, and investors. Inflation expectations are based on a variety of factors, including the current rate of inflation, economic growth, and the monetary policies of central banks. For more information about inflation expectations, you can visit websites such as the Federal Reserve Bank of St. Louis, the International Monetary Fund, and the World Bank.
See Also
- Expectations Theory of Inflation
- Natural Rate of Unemployment
- Rational Expectations Theory
- Consumer Price Index
- Monetary Policy
- Interest Rates
- Exchange Rates
- Gross Domestic Product
- Inflation Rate
- Deflation
