Five Facts About Inflation Expectations: Evidence from Four Different Groups of Agents

Résumé

There is a growing body of research on the inflation expectations of households, firms, and professional forecasters. However, direct comparison across these agents remains challenging as survey evidence typically stems from different countries, time periods and questionnaires. Furthermore, little is known about the inflation expectations of union representatives, who play critical roles in wage negotiations. This paper addresses these gaps using novel quarterly data from the Norges Bank Expectations’ Survey, harmonized since 2002 across households, business leaders, social partners (employer organizations and trade unions), and economists (professional forecasters and academics). We establish five stylized facts about how different agents in the economy form inflation expectations, how these feed into wage expectations and respond to external shocks, such as changes in electricity prices.