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Disagreement in households' inflation expectations and its evolution

March 27, 2014
Shusaku Nishiguchi, Jouchi Nakajima, Kei Imakubo
Monetary Affairs Department

One of the aspects characterizing inflation expectations is the degree of disagreement or dispersion in such expectations, and dispersion in households' inflation expectations is quite substantial. In phases in which inflation expectations alter, the shape of the distribution of inflation expectations, which reflects the dispersion, may change even when other measures of inflation expectations such as the mean and the median remain unchanged. This article examines how the distribution of households' medium-horizon inflation expectations in Japan evolves over time using the Opinion Survey on the General Public's Views and Behavior. The analysis shows that during the episode of rising prices since 2013 the expectations distribution has displayed notable changes that were not observed in the phase of rising prices in 2008.


Bank of Japan Review is published by the Bank of Japan to explain recent economic and financial topics for a wide range of readers. This report, 2014-E-1, is a translation of the original Japanese version, 2014-J-1, published in March 2014. The views expressed in the Review are those of the authors and do not necessarily represent those of the Bank of Japan.

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