Creation%20and%20Evolution%20of%20Inflation%20Expectations%20in%20Paraguay

Working Papers

Creation and Evolution of Inflation Expectations in Paraguay


CODE: IDB-WP-900
AUTHOR(s): Alonso, Pablo
PUBLISHED: August 2018
LANGUAGE: English
RELATED TOPICS: Macroeconomics
DOWNLOAD FILE IN: English

Abstract:

This paper seeks to identify the main determinants of the formation of inflation expectations in Paraguay since the adoption of the inflation targeting regime. This work bases the analysis on the results obtained from the expectations surveys conducted by the country’s monetary authority. Likewise, it is important to note that the dispersion of respondents’' answers was adjusted within the inflation range and that it has also decreased according to the reduction in this range. This further demonstrates the effectiveness of the expectations channel, thanks to the credibility that the central bank has been achieving.

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