Transformations  in
Business & Economics

PUBLIC INFORMATION, ACTUAL INTERVENTION AND INFLATION EXPECTATIONS¹¹
Qizhi He, Pingfan Xia, Chao Hu, Bo Li

ABSTRACT: The influencing factors for inflation expectations are researched from the perspectives of pubic information and practical intervention using time-varying models, constant model, Markov model, and Bayesian VAR model after measuring inflation expectations. The following conclusions are obtained: first, both pubic information and practical intervention provide additional information for inflation expectations. Moreover, public information plays a more significant role than practical intervention. Second, on pubic information, media opinion plays a more importance role than that of central bank information disclosure, and particularly, popular commercial media has a significant effect. Moreover, on practical intervention, money quantity tools have a more significant effect than that of rate tools. Third, inflation expectations are also influenced by inflation expectation persistence and actual inflation. From these findings, public information should be greatly considered in regulating inflation expectations, while information disclosure system and the role of official media should be improved to ensure stability of inflation expectations.

KEYWORDS:  inflation expectations, information disclosure, media opinion, time-varying model, Markov model.

JEL classification:  D84, E37, E58.

¹¹Acknowledgments:  This research was supported by the National Social Science Foundation of China (No.21BTJ002); Humanities and Social Science Fund of Ministry of Education of China (No.20YJA790021); Major Project of Philosophy and Social Science Planning of Zhejiang Province (22YJRC07ZD); Statistical Research Key projects in Zhejiang Province (No.22TJZZ01); the characteristic & preponderant  discipline of key construction universities in Zhejiang province (Zhejiang Gongshang University-Statistics).