Norges Bank

Staff Memo

Are inflation expectations anchored in Norway?

Solveig K. Erlandsen and Pål B. Ulvedal
Staff Memo

In this article, we investigate whether inflation expectations in Norway are anchored, in the sense that they show little response to new information and remain stable and close to the inflation target of 2.5 percent a few years ahead. We do this by analysing the responses of different groups in Norges Bank's expectations survey concerning their inflation expectations. Overall, the results indicate that inflation expectations are anchored. A substantial percentage of respondents in the groups expect inflation to be between 2.0 and 3.0 percent in two years' and in five years' time. The groups' average inflation expectations have been fairly stable and close to the inflation target over time. For one of the groups in the survey – financial economists – expectations for inflation five years ahead have been somewhat lower than the inflation target in recent years.

Staff Memos present reports and documentation written by staff members and affiliates of Norges Bank, the central bank of Norway. Views and conclusions expressed in Staff Memos should not be taken to represent the views of Norges Bank.

ISSN 1504-2596 (online)

Published 21 December 2017 15:15
Published 21 December 2017 15:15