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The Formation of Consumer Inflationary Expectations in Australia *
Author(s) -
DEFRIS L. V.,
WILLIAMS R. A.
Publication year - 1979
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1979.tb02213.x
Subject(s) - economics , inflation (cosmology) , indexation , consumer price index (south africa) , wage , index (typography) , price setting , consumer confidence index , monetary economics , econometrics , monetary policy , microeconomics , macroeconomics , labour economics , physics , theoretical physics , world wide web , computer science
This paper analyzes the quantitative price expectations of consumers as obtained from consumer surveys. Price expectations are considered as functions of (i) past rates of inflation (ii) other economic variables, and (iii) consumer sentiment variables. The dominant influence on expectations is the most recent change in the consumer price index. Wage‐indexation decisions and changes in the money supply also exert a significant influence on mean expectations. The variability of price expectations across consumers is proportional to the mean level of expectations.