Formation of Inflation Expectations: An Analysis in terms of Behavioral Economics

Salih Yıldırım; Müslüm Basılgan

Makale detayları

Formation of Inflation Expectations: An Analysis in terms of Behavioral Economics

Yazarlar:

Salih Yıldırım | Müslüm Basılgan

Yayıncı:

Mustafa Süleyman ÖZCAN

Ana Başlıklar:

Ekonomi

Dergi:

İnsan ve Toplum Bilimleri Araştırmaları Dergisi Vol.12 Issue 2, pp.1095-1121

Belge Tipi:

Makale

Yayın Tarihi:

6/2023

Belge Dili:

Türkçe

Document ID (Org No.):

2001289936

pISSN:

2147-1185

Anahtar kelimeler:

Özet:

 Since inflation expectations are an important determinant of real inflation, they play an important role in the execution of monetary policy. Central banks control the inflation expectations of economic agents and try to make them compatible with the inflation target. Regarding inflation expectations, the basic paradigm in mainstream economics is the rational expectations hypothesis. According to this hypothesis, economic units use all available information to create their expectations and make optimal forecasts for inflation. While making inflation forecasts based on rational expectations, it is accepted that the information is homogeneously distributed and the psychological factors limiting this information are the same. However, studies in the field of behavioral economics have criticized the rational expectations hypothesis based on the importance of incomplete information and uncertainty surrounding inflation forecasts, and the fact that beliefs about inflation can change over time, thus heterogeneity. As a result of these criticisms, alternative behavioral approaches have been developed to explain the formation of inflation expectations. The most important of these approaches are the sticky information model, the rational inattention approach, the epidemiological expectations approach, and the Bayesian learning model. In this context, the main purpose of the study is to reveal, on the basis of theoretical and empirical literature, how inflation expectations occur in real life, unlike rational expectations, in the context of behavioral economics. In the study, it is concluded that inflation expectations are formed as a result of heterogeneity in individual behaviors, contrary to the rational expectations hypothesis, and that behavioral economics makes a significant contribution to central banks both in maintaining price stability and in pursuing an effective monetary policy by explaining the formation of inflation expectations with different psychological approaches. The study revealed the deficiencies in the models that explain inflation expectations according to the rational expectations approach and revealed the importance of behavioral approaches in eliminating this deficiency.

 Since inflation expectations are an important determinant of real inflation, they play an important role in the execution of monetary policy. Central banks control the inflation expectations of economic agents and try to make them compatible with the inflation target. Regarding inflation expectations, the basic paradigm in mainstream economics is the rational expectations hypothesis. According to this hypothesis, economic units use all available information to create their expectations and make optimal forecasts for inflation. While making inflation forecasts based on rational expectations, it is accepted that the information is homogeneously distributed and the psychological factors limiting this information are the same. However, studies in the field of behavioral economics have criticized the rational expectations hypothesis based on the importance of incomplete information and uncertainty surrounding inflation forecasts, and the fact that beliefs about inflation can change over time, thus heterogeneity. As a result of these criticisms, alternative behavioral approaches have been developed to explain the formation of inflation expectations. The most important of these approaches are the sticky information model, the rational inattention approach, the epidemiological expectations approach, and the Bayesian learning model. In this context, the main purpose of the study is to reveal, on the basis of theoretical and empirical literature, how inflation expectations occur in real life, unlike rational expectations, in the context of behavioral economics. In the study, it is concluded that inflation expectations are formed as a result of heterogeneity in individual behaviors, contrary to the rational expectations hypothesis, and that behavioral economics makes a significant contribution to central banks both in maintaining price stability and in pursuing an effective monetary policy by explaining the formation of inflation expectations with different psychological approaches. The study revealed the deficiencies in the models that explain inflation expectations according to the rational expectations approach and revealed the importance of behavioral approaches in eliminating this deficiency.

 Since inflation expectations are an important determinant of real inflation, they play an important role in the execution of monetary policy. Central banks control the inflation expectations of economic agents and try to make them compatible with the inflation target. Regarding inflation expectations, the basic paradigm in mainstream economics is the rational expectations hypothesis. According to this hypothesis, economic units use all available information to create their expectations and make optimal forecasts for inflation. While making inflation forecasts based on rational expectations, it is accepted that the information is homogeneously distributed and the psychological factors limiting this information are the same. However, studies in the field of behavioral economics have criticized the rational expectations hypothesis based on the importance of incomplete information and uncertainty surrounding inflation forecasts, and the fact that beliefs about inflation can change over time, thus heterogeneity. As a result of these criticisms, alternative behavioral approaches have been developed to explain the formation of inflation expectations. The most important of these approaches are the sticky information model, the rational inattention approach, the epidemiological expectations approach, and the Bayesian learning model. In this context, the main purpose of the study is to reveal, on the basis of theoretical and empirical literature, how inflation expectations occur in real life, unlike rational expectations, in the context of behavioral economics. In the study, it is concluded that inflation expectations are formed as a result of heterogeneity in individual behaviors, contrary to the rational expectations hypothesis, and that behavioral economics makes a significant contribution to central banks both in maintaining price stability and in pursuing an effective monetary policy by explaining the formation of inflation expectations with different psychological approaches. The study revealed the deficiencies in the models that explain inflation expectations according to the rational expectations approach and revealed the importance of behavioral approaches in eliminating this deficiency.

 Enflasyon bekleyişleri gerçek enflasyonun önemli bir belirleyicisi olduğundan para politikasının yürütülmesinde önemli bir rol oynamaktadır. Merkez bankaları, iktisadi birimlerin enflasyon bekleyişlerini kontrol ederek enflasyon hedefiyle uyumlu olması için çabalamaktadır. Bu uyumun gerçekleşmesi durumunda merkez bankaları enflasyondaki dalgalanmaları daha rahat yönetebilme olanağına sahip olmakta ve enflasyonu kontrol etmede daha başarılı sonuçlar elde etmektedirler. Enflasyon bekleyişleriyle ilgili olarak ana akım iktisatta temel paradigma rasyonel bekleyişler hipotezidir. Bu hipoteze göre iktisadi birimler var olan tüm bilgiden yararlanarak bekleyişlerini oluşturmakta ve enflasyon konusunda optimal tahminlerde bulunmaktadırlar. Rasyonel bekleyişlere dayalı olarak enflasyon tahminleri yapılırken üstelik bilginin homojen dağıldığı ve bu bilgiyi sınırlayan psikolojik faktörlerin de aynı olduğu kabul edilmektedir. Fakat davranışsal iktisat alanında yapılan çalışmalar, enflasyon tahminlerini çevreleyen eksik bilginin ve belirsizliğin önemini ve enflasyon konusunda tutulan inançların zamanla değişebilmesini, dolayısıyla heterojenliği, temel alarak rasyonel bekleyişler hipotezine eleştiriler getirmişlerdir. Bu eleştirilerin sonucunda enflasyon bekleyişlerinin oluşumunu açıklamada alternatif davranışsal yaklaşımlar geliştirilmiştir. Bu yaklaşımların en önemlileri yapışkan bilgi modeli, rasyonel dikkatsizlik yaklaşımı, epidemiyolojik bekleyişler modeli ve Bayesyen öğrenme modelidir. Bu kapsamda çalışmanın temel amacı teorik ve ampirik literatür temelinde enflasyon bekleyişlerinin gerçek yaşamda, rasyonel bekleyişlerden farklı olarak, nasıl oluştuğunu davranışsal iktisat bağlamında ortaya koymaktır. Çalışmada enflasyon bekleyişlerinin, bireysel davranışlardaki heterojenliğin sonucu olarak, rasyonel bekleyişler hipotezine aykırı biçimde oluştuğu, davranışsal iktisadın enflasyon bekleyişlerinin oluşumunu farklı psikolojik yaklaşımlar ile açıklayarak merkez bankalarına hem fiyat istikrarını sağlamada hem de etkin bir para politikası izlemede önemli bir katkı sağladığı sonucuna ulaşılmıştır. Çalışma enflasyon bekleyişlerini rasyonel bekleyişler yaklaşımına göre açıklayan modellerdeki eksikliği ortaya koyarak bu eksikliği gidermede davranışsal yaklaşımların önemini ortaya koymuştur.

Makale detayları

Formation of Inflation Expectations: An Analysis in terms of Behavioral Economics

Yazarlar:

Salih Yıldırım | Müslüm Basılgan

Yayıncı:

Mustafa Süleyman ÖZCAN

Ana Başlıklar:

Ekonomi

Dergi:

İnsan ve Toplum Bilimleri Araştırmaları Dergisi Vol.12 Issue 2, pp.1095-1121

Belge Tipi:

Makale

Yayın Tarihi:

6/2023

Belge Dili:

Türkçe

Document ID (Org No.):

2001289936

pISSN:

2147-1185

Formation of Inflation Expectations

Inflation Expectations Uncertainty

Monetary Policy

Heterogenous Expectations

Behavioral EconomicsEnflasyon Bekleyişlerinin Oluşumu

Enflasyon Bekleyişleri Belirsizliği

Para Politikası

Heterojen Bekleyişler

Davranışsal İktisat

Sayı

Makale detayları

Yazarlar: Salih Yıldırım | Müslüm Basılgan

Yayıncı: Mustafa Süleyman ÖZCAN

Ana Başlıklar: Ekonomi

Dergi: İnsan ve Toplum Bilimleri Araştırmaları Dergisi Vol.12 Issue 2, pp.1095-1121

Belge Tipi: Makale

Yayın Tarihi: 6/2023

Belge Dili: Türkçe

Document ID (Org No.): 2001289936

pISSN: 2147-1185

Sayı

Yazarlar:

Salih Yıldırım | Müslüm Basılgan

Yayıncı:

Mustafa Süleyman ÖZCAN

Ana Başlıklar:

Ekonomi

Dergi:

İnsan ve Toplum Bilimleri Araştırmaları Dergisi Vol.12 Issue 2, pp.1095-1121

Belge Tipi:

Makale

Yayın Tarihi:

6/2023

Belge Dili:

Türkçe

Document ID (Org No.):

2001289936

pISSN:

2147-1185