Carola Binder on the Importance of Inflation Expectations and How Policymakers Should Respond

Carola Binder is an associate professor of economics at Haverford College and is currently a visiting scholar in the Monetary Policy Program at the Mercatus Center. She is also an associate editor at the Review of Economics and Statistics and the Journal of Money Credit and Banking. Carola rejoins Macro Musings to talk about inflation expectations and uncertainty. Specifically, David and Carola discuss why we should care about inflation expectations, which survey measures are most important, how policymakers should respond, and more.   Transcript for the episode can be found here.   Carola’s Twitter: @cconces Carola’s Haverford site Carola’s Mercatus profile   David’s Twitter: @DavidBeckworth Follow us on Twitter: @Macro_Musings Click here for the latest Macro Musings episodes sent straight to your inbox!   Related Links:   *Consumer Inflation Uncertainty Is Rising* by Carola Binder   *Stuck in the Seventies: Gas Prices and Consumer Sentiment* by Carola Binder and Christos Makridis   *Inflation Expectations and Consumption: Evidence from 1951* by Carola Binder and Gillian Brunet   *How Do Americans View Higher Inflation?* by Frank Newport   *Inflation Expectations and Consumer Spending: The Role of Household Balance Sheets* by Lenard Lieb and Johannes Schuffels   *Inflation Expectations and Readiness to Spend: Cross-Sectional Evidence* by Rudiger Bachmann, Tim Berg, and Eric Sims   *A New Measure of Monetary Shocks: Derivation and Implications* by Christina Romer and David Romer