Inflation expectations in Singapore: A behavioural approach

Author

Alexander CLARK, Behavioural Insights Team
Aurobindo GHOSH, Singapore Management UniversityFollow
Samuel HANES, Behavioural Insights Team

Publication Type

Journal Article

Version

publishedVersion

Publication Date

4-2018

Abstract

The expectations of economic agents have significant impact on their decisions and are key determinants of macroeconomic outcomes such as inflation, economic growth and unemployment. For example, if a worker believes that consumer prices will rise sharply next year, she would demand a wage increase. Similarly, a homeowner with a fixed interest mortgage might make an early repayment if she expects price levels to fall, knowing that the real value of her mortgage debt will increase. In these cases, expectations about inflation could lead to changes in behaviour and in the aggregate, influence prices and become self-fulfilling.

Keywords

Inflation, Singapore

Discipline

Asian Studies | Behavioral Economics | Finance | Finance and Financial Management

Research Areas

Finance

Publication

Macroeconomic Review

Volume

XVII

Issue

1

First Page

89

Last Page

98

ISSN

0219-8908

Publisher

Monetary Authority of Singapore

Citation

CLARK, Alexander; GHOSH, Aurobindo; and HANES, Samuel. Inflation expectations in Singapore: A behavioural approach. (2018). Macroeconomic Review. XVII, (1), 89-98.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/5879

Copyright Owner and License

Publisher / SKBI

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.

Additional URL

http://www.mas.gov.sg/~/media/MAS/Monetary Policy and Economics/Education and Research/Research/Economics Essays/2018 Apr/17 Special Feature C.pdf