Long-term inflation expectations in the euro area remained well anchored during the global financial crisis and were therefore insensitive to the arrival of economic news. This article investigates the behaviour of expectations in the euro area during the most recent period and finds evidence that the de-anchoring of expectations started in December 2011 and never reversed. This is in line with the more aggressive stance held by the ECB in the following months as well as with the pattern of ECB Professional Forecasters’ expectations.

Keywords: Inflation expectations, ECB, Euro area, De-anchoring.

JEL Classification: E31, E52, E58, C22

(Published on Applied Economics Letters, 24(20), 1481-1485: https://dx.doi.org/10.1080/13504851.2017.1287846)