Most central banks in advanced economies pursue an inflation targeting policy. The key characteristic of this regime is that a central bank can influence the future inflation path by managing expectations of economic agents. Therefore, the anchoring of inflation expectations, that is their response to short-term inflation shocks, is of high importance.
Data on inflation expectations are usually obtained from sociological surveys or indirect estimates of observed data. As a result, they may differ in different groups of economic agents and influence inflation in different ways.
What approaches are used to measure inflation expectations, assess their effect on inflation and determine to what extent they are anchored? How should monetary policy decision-making take inflation expectations into account?