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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research

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Long-run inflation expectations in the ECB survey of professional forecasters: what do the survey responses tell us?, Equilibrium. Quarterly Journal of Economics and Economic Policy 4 (2020). Oinonen, Sami; Virén, Matti


Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
Oinonen Sami / Monetary Policy and International Economy
All authors as text Oinonen, Sami; Virén, Matti 
Number of authors 2 
Status Published
Year of publication 2020 
Date 20.12.2020 
Name of article Long-run inflation expectations in the ECB survey of professional forecasters: what do the survey responses tell us? 
Name of journal Equilibrium. Quarterly Journal of Economics and Economic Policy
Volume of issue 15 
Number of issue 4 
Pages 675-695 
Abstract Research background: At the background, there are issues related to policy credibility and policy targets. For these issues, long-term forecasts can provide important information. Of course, long-term forecasts are needed also e.g. for evaluation of real returns.

Purpose of the article: This paper tries to find out how informative the ECB Survey of Professional Forecasters data on long-term inflation prospects are from the point of view of the overall quality of the survey and on the other hand from the point of view of monetary policy credibility.

Methods: The analysis makes use of individual forecaster level quarterly panel data for the period 1999Q1?2018Q4. Conventional panel econometrics tools are used to find out whether forecasts are sensitive to changes in actual inflation and other relevant variables.

Findings & Value added: We find some weaknesses considering the size of the survey, the selection of the sample (more precisely the participation to the survey) and the inertial responses of forecasters which suggest that the survey values are not actively updated. Moreover, we find that towards the end of the sample period, the survey values are related to actual inflation and to short-term expectations, which is not consistent with the credibility of the official inflation target.
Free text descriptor in Finnish inflaatio; odotukset 
Free text descriptor in English inflation expectations, policy credibility, survey data 
JEL-codes E37; V83 
ISSN / e-ISSN 2353-3293 
auki Internet addresses
Open Access Not known