Book contents
- The Behavioral Economics of Inflation Expectations
- The Behavioral Economics of Inflation Expectations
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Preface
- 1 Patterns and Expectations
- 2 Extrapolation and Expectations
- 3 Eliciting Expectations under Laboratory Conditions
- 4 Features of the Laboratory Data
- 5 Similarity Matching and Scaling the Experimental Data
- 6 Pattern Extrapolation and Expectations Measured by Consumer Surveys
- 7 Heterogeneity and Uncertainty of Inflation Expectations
- 8 Inflation Dynamics
- 9 Explaining the Course of Interest Rates
- 10 Generalizing the Pattern-Based Approach
- 11 A Detour to Income Expectations
- 12 The Fisher Effect in Historical Times
- 13 Expectations of High Inflation
- 14 The Fisher Effect in Asian Economies
- 15 The Fisher Effect in African Economies
- 16 Estimates of Expected Inflation for Major Economies
- 17 Estimates of Expected Real Interest Rates for Major Economies
- Epilogue
- References
- Index
5 - Similarity Matching and Scaling the Experimental Data
Published online by Cambridge University Press: 24 July 2020
Book contents
- The Behavioral Economics of Inflation Expectations
- The Behavioral Economics of Inflation Expectations
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Preface
- 1 Patterns and Expectations
- 2 Extrapolation and Expectations
- 3 Eliciting Expectations under Laboratory Conditions
- 4 Features of the Laboratory Data
- 5 Similarity Matching and Scaling the Experimental Data
- 6 Pattern Extrapolation and Expectations Measured by Consumer Surveys
- 7 Heterogeneity and Uncertainty of Inflation Expectations
- 8 Inflation Dynamics
- 9 Explaining the Course of Interest Rates
- 10 Generalizing the Pattern-Based Approach
- 11 A Detour to Income Expectations
- 12 The Fisher Effect in Historical Times
- 13 Expectations of High Inflation
- 14 The Fisher Effect in Asian Economies
- 15 The Fisher Effect in African Economies
- 16 Estimates of Expected Inflation for Major Economies
- 17 Estimates of Expected Real Interest Rates for Major Economies
- Epilogue
- References
- Index
Summary
This chapter details how the laboratory data on expectations are used to generate historical series of expectations.1 In essence, and proceeding on the assumption that economic agents function just like our subjects in the laboratory, we fit the responses of subjects to historical four-year sequences of the price level. In this process of fitting the laboratory expectations to historical data, two important aspects of behavior have to be addressed. The first aspect is the issue of similarity matching and the second concerns the scaling of the elicited data.
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- Information
- The Behavioral Economics of Inflation ExpectationsMacroeconomics Meets Psychology, pp. 53 - 68Publisher: Cambridge University PressPrint publication year: 2020