Book contents
- The Behavioral Economics of Inflation Expectations
- The Behavioral Economics of Inflation Expectations
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Preface
- 1 Patterns and Expectations
- 2 Extrapolation and Expectations
- 3 Eliciting Expectations under Laboratory Conditions
- 4 Features of the Laboratory Data
- 5 Similarity Matching and Scaling the Experimental Data
- 6 Pattern Extrapolation and Expectations Measured by Consumer Surveys
- 7 Heterogeneity and Uncertainty of Inflation Expectations
- 8 Inflation Dynamics
- 9 Explaining the Course of Interest Rates
- 10 Generalizing the Pattern-Based Approach
- 11 A Detour to Income Expectations
- 12 The Fisher Effect in Historical Times
- 13 Expectations of High Inflation
- 14 The Fisher Effect in Asian Economies
- 15 The Fisher Effect in African Economies
- 16 Estimates of Expected Inflation for Major Economies
- 17 Estimates of Expected Real Interest Rates for Major Economies
- Epilogue
- References
- Index
17 - Estimates of Expected Real Interest Rates for Major Economies
Published online by Cambridge University Press: 24 July 2020
- The Behavioral Economics of Inflation Expectations
- The Behavioral Economics of Inflation Expectations
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Preface
- 1 Patterns and Expectations
- 2 Extrapolation and Expectations
- 3 Eliciting Expectations under Laboratory Conditions
- 4 Features of the Laboratory Data
- 5 Similarity Matching and Scaling the Experimental Data
- 6 Pattern Extrapolation and Expectations Measured by Consumer Surveys
- 7 Heterogeneity and Uncertainty of Inflation Expectations
- 8 Inflation Dynamics
- 9 Explaining the Course of Interest Rates
- 10 Generalizing the Pattern-Based Approach
- 11 A Detour to Income Expectations
- 12 The Fisher Effect in Historical Times
- 13 Expectations of High Inflation
- 14 The Fisher Effect in Asian Economies
- 15 The Fisher Effect in African Economies
- 16 Estimates of Expected Inflation for Major Economies
- 17 Estimates of Expected Real Interest Rates for Major Economies
- Epilogue
- References
- Index
Summary
In the following, estimates of the real interest rate will be presented for the 10 largest economies according to the World Bank comparison for 2017. The countries included are the USA, China, Japan, Germany, United Kingdom, India, France, Brazil, Italy, and Canada. The interest rate used for this purpose is the nominal lending rate reported by the World Bank. Besides data on the nominal rates, the World Bank also reports real rates of interest. For these official calculations, inflation is measured as the percentage change of the GDP Deflator. For comparison and for the use by analysts and historians, we offer estimates of ex ante real rates based on the pattern approach. For this purpose, pattern-based expected inflation rates are computed (based on GDP-deflator data published by the World Bank) and used to correct the nominal lending rate for the expected inflation.1 Evidently, the ex ante real rate of interest (i.e., neither the nominal rate nor the ex post real rate) appropriately characterizes the circumstances under which economic decisions, for example, by investing firms, are taken.
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- Information
- The Behavioral Economics of Inflation ExpectationsMacroeconomics Meets Psychology, pp. 199 - 205Publisher: Cambridge University PressPrint publication year: 2020