Formation of Price and Cost Inflation Expectations in British Manufacturing Industries

A Multi-Sectoral Analysis

Bibliographic Data

ID9705469
AuthorsKevin Lee (0000-0001-6334-3383, University of Cambridge, corresponding author), Kevin C Lee (0000-0003-0210-2628)
Year1994
Volume104
Issue423
Pages372
Publication date1994-03-01
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.2307/2234757
OpenAlexW1996987978
LanguageEN
Citations received4
References cited5

The process by which agents form expectations on price and cost inflation is investigated. Measures of expectations of these series, derived from qualitative survey responses in nine industrial sectors covering UK manufacturing between 1972-1989, are described, and the ‘rationality' of these expectations tested. Rationality is not rejected in many sectors, and the evidence against rationality much weakened in other sectors, if tests take into account a particular form of conversion error. The possible effect of aggregation bias in the tests is noted, as rationality is rejected with more confidence with aggregated data than when the sectoral data is considered individually

Econometrics · Economics · Inflation (cosmology · Macroeconomics · Manufacturing sector · Microeconomics · Process (computing · Rationality · Computer Science · Economic Theory and Policy · Housing Market and Economics · Monetary Policy and Economic Impact

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