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Ashima Goyal and Prashant Mehul Parab
''Modeling Consumers' Confidence and Inflation Expectations''
( 2019, Vol. 39 No.3 )
This study analyzes the socio-economic factors that influence inflation expectations of Indian households. Using Consumer Confidence Survey data we discover that inflation expectations of households depend largely on inflation perceptions, income, education of the respondents, and outlook on economy, employment and spending. Women, lower income individuals and less educated persons tend to have higher inflation expectations. Macroeconomic variables like inflation, repo rate and GDP growth rate influence inflation expectations positively. Along with these variables, inflation projections by the Reserve Bank of India play a pivotal role in influencing inflation expectations of households. A significant role of the Reserve Bank in anchoring inflation expectations via communications is visible from this analysis.
Keywords: Consumer Confidence Survey, Demographics, Ordered Logit, Central Bank Communications
JEL: E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General
D1 - Household Behavior: General
Manuscript Received : Jun 20 2019 Manuscript Accepted : Aug 11 2019

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