Journal of Business Cycle Measurement and Analysis

Frequency
3 times a year
ISSN: 
1729-3626 (online)
ISSN: 
1729-3618 (print)
http://dx.doi.org/10.1787/17293626
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The Journal of Business Cycle Measurement and Analysis has been discontinued as of 24 June 2016. This journal was published jointly with CIRET from 2004 to 2015. For more information see www.ciret.org/jbcy.

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Article
 

Quantifying Inflation Expectations with the Carlson-Parkin Method

A Survey-based Determination of the Just Noticeable Difference You do not have access to this content

English
 
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    http://oecd.metastore.ingenta.com/content/3305031ec002.pdf
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Author(s):
Steffen Henzel, Timo Wollmershäuser
05 Apr 2006
Pages:
32
Bibliographic information
No.:
13,
Volume:
2005,
Issue:
3
Pages:
321–352
http://dx.doi.org/10.1787/jbcma-v2005-art8-en

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This paper presents a new methodology for the quantification of qualitative survey data. Traditional conversion methods, such as the probability approach of Carlson and Parkin (1975) or the time-varying parameters model of Seitz (1988), require very restrictive assumptions concerning the expectations formation process of survey respondents. Above all, the unbiasedness of expectations, which is a necessary condition for rationality, is imposed. Our approach avoids this assumptions. The novelty lies in the way the boundaries inside of which survey respondents expect the variable under consideration to remain unchanged are determined. Instead of deriving these boundaries from the statistical properties of the reference time-series (which necessitates the unbiasedness assumption), we directly queried them from survey respondents by a special question in the Ifo World Economic Survey. The new methodology is then applied to expectations about the future development of inflation obtained from the Ifo World Economic Survey.

 
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