Staff Reports
A New Approach to Assess Inflation Expectations Anchoring Using Strategic Surveys
Number 1007
February 2022

JEL classification: D12, D84, E31, E52

Authors: Olivier Armantier, Argia M. Sbordone, Giorgio Topa, Wilbert van der Klaauw, and John C. Williams

We propose a new approach to assessing the anchoring of inflation expectations using “strategic surveys.” Namely, we measure households’ revisions in long-run inflation expectations after they are presented with different economic scenarios. A key advantage of this approach is that it provides a causal interpretation in terms of how inflation events affect long-run inflation expectations. We implement the method in the summer of 2019 and the spring-summer of 2021 when the anchoring of long-run inflation expectations was in question. We find that the risk of unanchoring of expectations was reasonably low in both periods, and that long-run inflation expectations were essentially as well anchored in August 2021 as in July 2019, before the COVID-19 pandemic.

See the appendix below for the survey questionnaire designed for this study.

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