Households’ Inflation Expectations: A Behavioural Lens for Measurement and Policy Communication
Households’ Inflation Expectations: A Behavioural Lens for Measurement and Policy Communication

Author(s): Vanya Hristova
Subject(s): Economy, National Economy, Micro-Economics, ICT Information and Communications Technologies
Published by: Икономически университет - Варна
Keywords: inflation expectations; households; behavioural economics; expectations measurement; policy communication
Summary/Abstract: Households’ inflation expectations shape consumption, saving, wage setting, and the credibility of monetary policy. This report synthesizes evidence on expectation formation, reading the literature through a behavioural lens-information design, cognitive shortcuts, affect, and social context-alongside the rational-expectations benchmark. The analysis is conceptual and integrative; no econometric estimation is undertaken. Two operational domains follow. For measurement, the report reviews direct (surveys and survey-embedded experiments) and indirect (markets, behavioural traces, text, modelling) approaches, recommending light safeguards to limit framing, anchoring, and salience while preserving comparability. For policy communication, it proposes information design that prioritizes signal over noise: lead with a stable medium-term anchor, contextualize volatile components, disclose uncertainty ranges and base rates, use neutral tone and consistent sequencing, and evaluate releases as policy. The contribution is pragmatic: align conventional tools with documented behavioural regularities to improve interpretability, tighten anchoring of expectations, reduce overreaction to transitory shocks, and strengthen institutional credibility over time.

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