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Economics vocabulary · Inflation and Prices

Inflation expectations

Meaning in economics, with examples

nounCommon term

In economics, inflation expectations means: What households, firms and investors believe inflation will be in the future; these beliefs affect wage demands, prices and interest rates today.

In Turkish: enflasyon beklentileri

How it is used

A key idea in central bank communication. Expectations can be well anchored (stable near the target) or de-anchored. They are measured by surveys, such as the CBRT's Survey of Market Participants, and by the prices of inflation-linked bonds.

Example sentences

  1. Inflation expectations remain well anchored despite the recent rise in oil prices.

  2. If inflation expectations rise, workers will ask for bigger pay increases.

Common collocations

  • anchor inflation expectations
  • well-anchored expectations
  • inflation expectations survey
  • de-anchored expectations
  • inflation targetThe rate of inflation that a central bank officially aims to achieve over the medium term, such as 2% a year.
  • price stabilityA situation in which the general level of prices rises only slowly and predictably, so that inflation does not disturb economic decisions.
  • forward guidanceCommunication by a central bank about the likely future path of interest rates, used to shape what markets and the public expect.
  • wageThe money a worker is paid for their work, especially when it is calculated by the hour, day or week.
  • monetary policyThe actions a central bank takes to influence interest rates, the money supply and credit in order to control inflation and support the economy.

More terms: Inflation and Prices

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