The role of long-term inflation expectations for the transmission of monetary policy shocks

Max Diegel, Dieter Nautz, Universitätsbibliothek Der FU Berlin
2020
This paper empirically investigates the role of long-term inflation expectations for the monetary transmission mechanism. In contrast to earlier studies, we confirm that U.S. long-term inflation expectations respond significantly to a monetary policy shock. In line with a re-anchoring channel of monetary policy, we find that long-term inflation expectations play an important role for the transmission of monetary policy shocks to the rate of inflation. Our results are robust with respect to the
more » ... ith respect to the identification strategy and alternative monetary policy indicators applied during the zero lower bound period.
doi:10.17169/refubium-28578 fatcat:lswik5wllvftllajjkvrzwg3fa