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I’m currently working with macroeconomic forecasts by banks and research institutes (CEF). When I checked out inflation expectations, the following figure caught my attention:

Inflation expectations in Japan, influenced by Abenomics

The black solid line is quarterly Japanese consumer price inflation (CPI). The gray areas are two standard errors above and below the mean forecast. (Forecaster dispersion is a reasonable proxy of how uncertain forecasters are.) I overlaid the 12-month ahead forecast with the subsequent realizations.

The jump in inflation expectations in 2013 (Abe won in December 2012) is quite striking. And that effect seems to have abated somewhat since then.


Bachmann, R., S. Elstner and E. R. Sims (2013). “Uncertainty and Economic Activity: Evidence from Business Survey Data”. American Economic Journal: Macroeconomics, 5(2): 217-49.