Learning outcomes

By the end of the seminar course "Inflation, Inflation Expectations, and Central Bank Communication," students will develop a comprehensive understanding of how inflation expectations influence actual inflation and monetary policy decisions. They will be able to analyze survey-based and market-based measures of inflation expectations, assess their impact on macroeconomic dynamics, and evaluate the effectiveness of central bank communication in guiding market behavior. Additionally, students will gain the ability to apply theoretical and empirical methods to estimate key economic relationships, such as the Phillips Curve, while critically comparing the communication strategies of major central banks. Through engagement with real-world data, students will explore how inflation expectations evolve over time and how central banks adapt their policies accordingly.

 

Goals

Understanding the dynamics of inflation, particularly the role of inflation expectations, are central to the formulation and implementation of monetary policy. For policymakers aiming to maintain price stability, it is essential to know how households, firms, and financial markets anticipate future price movements. Over the past two decades, central banks have significantly transformed their communication strategies, enhancing transparency and openness to anchor expectations more effectively and guide market behavior.

In this course, we will examine a complex interplay between inflation, inflation expectations and monetary policy communication.

 

Content

Through a combination of theoretical discussions and practical data analysis exercises, we will address the following key questions:

  • How to collect and analyze survey-based measures of inflation expectations, such as Survey of Professional Forecasters, the University of Michigan Surveys of Consumers, or the ECB's Survey of Professional Forecasters.
  • Evaluation of accuracy and dynamics of inflation expectations and how they compare across different groups and over time.
  • Analysis of deviations of inflation expectations from the Rational Expectations hypothesis.
  • The application of inflation expectations data to estimate crucial economic relationships, such as the Phillips Curve.
  • The role of Inflation expectations for the effectiveness of monetary policy.
  • Analysis of central bank communication strategies and their impact on expectation formation, financial markets, and broader economic dynamics.
  • Comparative analysis of communication strategies across different central banks (e.g., the Federal Reserve, ECB, Bank of Japan) and their influence on inflation expectations.

Assessment method

Students' presentations

Language of instruction

Français
Training Study programme Block Credits Mandatory
Master in Economics : General, Professional focus Standard 0 5
Master in Economics : General, Professional focus Standard 2 5