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The author analyzes households' inflation expectations data for India, collected quarterly by the RBI for more than a decade. The contribution of this paper lies in two folds. First, this study examines the relationship between relatively recent inflation expectations survey of households (IESH) and the actual inflation for India. Secondly, the author employs a structural VAR with the time period 2006 Q2 to 2020 Q2 on inflation expectation survey data of India. A short-term non-recursive restriction is imposed in the model in order to capture the simultaneous co-dependence causal effect of inflation expectation and realized inflation.

This paper studies the dynamic behavior of inflation expectations survey data in two folds. First, the author analyzes the time series property of the survey data. The author begins with testing the stationarity property of the series, followed by the casual relationship between the expected and actual inflation. The author further examines the short-run and long-run behavior of the IESH with actual inflation. Employing autoregressive distributed lag and Johansen co-integration, the author tested if a long-run relationship exists between the variables. In the second approach, the author investigates the determinants of inflation expectations by employing a non-recursive SVAR model.

The preliminary explanatory test reveals that inflation expectation is a policy variable and should be used in monetary policy as an instrument variable. The model identifies the price puzzle for India. The author finds that the response of inflation to a monetary policy shock is neutral. The results also indicate that the expectations of the general public are self-fulfilling.

IESH has only commenced from September 2005, hence is relatively new as compared to other survey in developed countries. Being a new data set so far, the author could not locate any study devoted in analyzing the behavior of the data with other macroeconomic variables.

This paper surveys the treatment of expectations in estimated Dynamic Stochastic General Equilibrium (DSGE) macroeconomic models.

A recent notable development in the empirical macroeconomics literature has been the rapid growth of papers that build structural models, which include a number of frictions and shocks, and which are confronted with the data using sophisticated full-information econometric approaches, often using Bayesian methods.

A widespread assumption in these estimated models, as in most of the macroeconomic literature in general, is that economic agents' expectations are formed according to the Rational Expectations Hypothesis (REH). Various alternative ways to model the formation of expectations have, however, emerged: some are simple refinements that maintain the REH, but change the information structure along different dimensions, while others imply more significant departures from rational expectations.

I review here the modeling of the expectation formation process and discuss related econometric issues in current structural macroeconomic models. The discussion includes benchmark models assuming rational expectations, extensions based on allowing for sunspots, news, sticky information, as well as models that abandon the REH to use learning, heuristics, or subjective expectations.

Empirical work in macroeconomics almost universally relies on the hypothesis of rational expectations (RE).

This chapter departs from the literature by considering a variety of alternative expectations formation models. We study the econometric properties of a popular New Keynesian monetary DSGE model under different expectational assumptions: the benchmark case of RE, RE extended to allow for “news” about future shocks, near-RE and learning, and observed subjective expectations from surveys.

The results show that the econometric evaluation of the model is extremely sensitive to how expectations are modeled. The posterior distributions for the structural parameters significantly shift when the assumption of RE is modified. Estimates of the structural disturbances under different expectation processes are often dissimilar.

The modeling of expectations has important effects on the ability of the model to fit macroeconomic time series. The model achieves its worse fit under RE. The introduction of news improves fit. The best-fitting specifications, however, are those that assume learning. Expectations also have large effects on forecasting. Survey expectations, news, and learning all work to improve the model's one-step-ahead forecasting accuracy. RE, however, dominate over longer horizons, such as one-year ahead or beyond.

Inflation expectations are an important part of the transmission mechanism of the inflation targeting regime. As such, central bankers must study the inflation expectations of economic agents to anchor them close to the level of the inflation target. However, economic agents are affected by the past and current macroeconomic situation when they form their expectations concerning future inflation. Using survey data on inflation expectations in Czechia, we investigate the macroeconomic determinants of Czech analysts' and managers' inflation expectations. We find that both actual and past inflation have a substantial impact on inflation expectations of the agents surveyed. We also identify backward-looking behaviour among these agents: persistence in inflation expectations of up to two quarters was detected. Moreover, financial analysts formed inflation expectations more in line with economic theory, while company managers evinced expectations similar to those of consumers.

The purpose of this paper is twofold. First, the study aims to test whether expectations are adaptive in the Auckland housing market. The second purpose is to examine the interplay between expectations and Auckland housing prices.

In this study, two vector error correction models (VECM) are built: one VECM includes survey-based expectations and another one encompasses model-based expectations with the assumption that property investors’ expectations are adaptive. The paper goes on by comparing and examining the results of Granger causality tests and impulse response analyses.

The findings reveal that Auckland property buyers’ expectations are adaptive. In addition, this study provides some evidence of a feedback cycle between Auckland housing prices and expectations.

This study posits that Auckland property buyers’ expectations in the next 12 months are based on three-year price movements with more emphasis being placed on recent price history. This assumption may not be an accurate reflection of true expectations.

This paper helps policymakers to deepen their understanding of Auckland property buyers by showing that their expectations form through the extrapolation of the past price trend.

The study possibly marks the first attempt to test and compare the relationship between housing prices and two forms of expectations: survey-based and model-based. Additionally, this study is probably the first one that empirically examines whether there is a feedback cycle between expectations and property prices in the Auckland housing market.

This study investigates which expectation formation mechanism governs Eurozone firms regarding their expectations on external finance availability.

In this study, we link consecutive surveys from the Survey on the Access to Finance of Enterprises to bring new evidence on how non-financial corporations shape their expectations on external finance availability.

In line with the past literature, we demonstrate that the data reject the Rational Expectations hypothesis, and we find evidence in favor of the Adaptive Expectation mechanism.

This is the first study studying firms' expectations of external finance availability, implementing survey data of firms' expectations from the SAFE database on a country level. The formation of firm expectations is vital in directing policymakers in designing appropriate monetary policies, as both the employment and inflation targets of central banks around the world are highly dependent on the firm-level decision process.

The purpose of this paper is to measure individual investors’ expectations of risk and return and to evaluate different expectation measures.

The authors measure individual investors’ expectations of risk and return regarding an index fund and two stocks using survey data on a random sample of individual investors in Sweden. The survey contains three different return and four different risk expectation measures. To evaluate the different expectation measures, three different evaluation perspectives are considered.

The risk expectations obtained from the different measures are positively correlated across respondents, but their average magnitudes differ considerably across measures. The return expectations are also positively correlated, and their magnitudes also differ, but to a lesser extent. Consequently, the same individual can express risk expectations that either underestimate or overestimate the forward risk, depending on the measure that is used. The variations in the expectations mainly relate to differences in the responses to the questions underlying the different measures, rather than to the methods used to obtain the expectations. The results from the evaluation of the measures indicate that the expectation measure proposed by Dominitz and Manski (2011) is the only measure for which it is possible to distinguish between individuals’ expectations, using all three of the evaluation perspectives.

This is, to the best of the authors’ knowledge, the first paper that evaluates different survey measures of individual investors’ expectations of risk and return.

Providing care that is patient-centered is an important objective in the modern healthcare industry. Despite this objective, hospital inpatient case managers and the services they provide are evaluated routinely without including patients' perspectives. Therefore, the purpose of this study is to fill this research gap by using patient expectations and perceptions to assess the overall quality of and patient satisfaction with hospital case management services.

This paper investigates five dimensions of case management services – reliability, responsiveness, assurance, empathy and tangibles – and how they affect overall quality and patient satisfaction. Study surveys are based on the SERVQUAL instrument. Survey data from a cross-sectional sample of 67 inpatients are analyzed using principal component analysis, confirmatory factor analysis, GAP analysis and a predictive model.

The preliminary part of the study identifies “tangibles” and “nontangibles” – reliability, responsiveness, assurance and empathy – as the main components. Among these two components, only nontangibles have a positive and significant effect on both quality and patient satisfaction according to patient perspectives. GAP analysis indicates that gaps between patient expectations and perceptions of reliability and assurance are significant. Finally, the proposed predictive model reveals that gaps in assurance have a significant impact on both overall quality and satisfaction, while gaps in empathy have a significant impact on satisfaction, but not overall quality.

Studies on service quality at the case manager level are limited. This study is the first in this domain to evaluate quality and satisfaction from the patient perspective.

The Inflation Expectations Survey of Households, conducted by the Reserve Bank of India (RBI), indicates that there is considerable disparity in inflation expectations across cities in India. The purpose of this paper is to investigate why different cities exhibit heterogeneous inflation expectations despite coming under a central monetary policy umbrella.

First, the correspondence between city-level inflation expectations and city-specific economic characteristics is mapped. Second, how the disagreement in inflation expectations across cities, measured by dispersion, behaves over the business cycle is investigated. Finally, using seemingly unrelated regression technique, the economic factors that play a role in explaining inflation expectations heterogeneity across cities are estimated.

Cities with higher economic activity and cost of living have higher inflation expectations. Disagreement across cities regarding inflation expectations rise with an increase in output gap and inflation. Information friction plays an important role in explaining the disparity in inflation expectations across cities, and the effects of macro-level factors vary across cities, thereby accentuating expectations dispersion.

Monetary policy-related communication by the RBI (toward the general public) should increase in order to address information friction, which, in turn, would temper down the extent of inflation expectations heterogeneity across cities in India.

This is a novel application of the data from the monetary policy perspective. Heterogeneity in inflation expectations across cities or regions is an unexplored area. The use of nightlights as a proxy for city-level economic activity in India (in absence of data on city-level income) is another original contribution.

The purpose of this research is to bring upfront some unconventional attributes of inflationary expectations of entrepreneurs. Firm-level attributes are instrumental in shaping the behavior of entrepreneurs, which affect the way in which they form their expectations regarding some key economic variables, like inflation. Inflationary expectations are considered important based on their significant role in affecting decisions taken by individuals, firms and policy makers. Among all economic segments, it is vital to account the inflationary expectations of entrepreneurs representing firms because their decisions critically define the future path of actual inflation and inflation inertia. This basic purpose of this paper is to offer a deterministic framework for these expectations contingent upon the firm-level attributes.

This paper provides survey-based evidence on inflationary expectations of entrepreneurs of the selected manufacturing, trading and service sector firms from Pakistan. Additionally, the study has focused on identifying some firm-level attributes, including market experience of the firm, scale of production, myopia in price setting behavior, forward and backward-looking behavior, rationality of the entrepreneur and the entrepreneur's relative firm-level experience as determinants of these expectations. The specified variables are constructed based on responses captured through a structured questionnaire.

Within an ordinal logistic framework, the study finds that the said attributes including market experience of the firm, scale of production, myopic tendency of entrepreneur in price setting, forward and backward-looking behavior, rationality of the entrepreneur and the entrepreneur's relative firm-level experience play a pivotal role in explaining differentials and heterogeneity in reported level of inflationary expectations.

The study brings upfront some unconventional attributes of inflationary expectations at entrepreneurial level. The work is unique in a sense that it provokes researchers to account behavioral and individualistic attributes within a deterministic framework for inflationary expectations.