Board of Governors of the Federal Reserve System

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Note: This figure, reproduced from Beechey, Johannsen, and Levin (2008), depicts long-run expectations for euro area inflation, as measured by the Harmonised Index of Consumer Prices (HICP), and for U.S. inflation, as measured by the consumer price index (CPI). In the left panel, the solid line denotes the mean of individual respondents' 5-year-ahead projections in the quarterly survey of professional forecasters conducted by the European Central Bank (ECB) and published on its website (www.ecb.int/stats/prices/indic/forecast/html/index.en.html) ; the dashed line denotes the mean of individual respondents' 6- to 10-year-ahead projections in semiannual surveys conducted by Consensus Economics, Inc., and published in Consensus Forecasts. In the right panel, the solid line denotes the mean of individual respondents' 7- to 11-year-ahead projections in semiannual surveys conducted by Aspen Publishers, Inc., and published in Blue Chip Economic Indicators; the short-dashed line denotes the mean of individual respondents' 6- to 10-year-ahead projections in semiannual surveys conducted by Consensus Economics, Inc., and published in Consensus Forecasts; the long-dashed and dot-dashed lines denote the mean and the median, respectively, of individual respondents' 10-year-average projections in the quarterly Survey of Professional Forecasters (SPF) conducted by the Federal Reserve Bank of Philadelphia (www.philadelphiafed.org/econ/spf).

Note: This figure, reproduced from Beechey, Johannsen, and Levin (2008), depicts the standard deviation of individual respondents' long-run inflation projections in each survey. The solid line and the long-dashed line refer to the 10-year-average projections for U.S. inflation, as measured by the consumer price index (CPI) and the chain-weighted price index for personal consumption expenditures (PCE), respectively, in the quarterly Survey of Professional Forecasters conducted by the Federal Reserve Bank of Philadelphia (www.philadelphiafed.org/econ/spf). The short-dashed line refers to 5-year-ahead projections for euro area inflation, as measured by the Harmonised Index of Consumer Prices (HICP), in the quarterly survey of professional forecasters conducted by the European Central Bank (www.ecb.int/stats/prices/indic/forecast/html/index.en.html) .

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Note: This figure, reproduced from Beechey, Johannsen, and Levin (2008), depicts the evolution of one-year forward rates of inflation compensation ending ten years ahead for the euro area (solid line) and the United States (dashed line). The euro area series is computed using dealer quotes on inflation swap contracts, and the U.S. series is computed from spreads between nominal and inflation-indexed U.S. Treasury securities.

Note: In this figure, each diamond indicates the standard deviation of consumer price inflation (horizontal axis) and the standard deviation of the unemployment gap (vertical axis) for the specified industrial economy, where the unemployment gap refers to the deviation between the actual unemployment rate and the natural unemployment rate, as estimated by the Organisation for Economic Co-operation and Development (OECD) and reported in semiannual issues of its Economic Outlook.

Note: This figure depicts the distribution of inflation expectations for the United Kingdom and the United States in the fourth quarter of 2001 (upper left panel), the first quarter of 2004 (upper right panel), and the second quarter of 2008 (lower panel). The solid bars denote the distribution of 13-quarter-ahead inflation projections of respondents to the Bank of England's survey of professional forecasters and published in each quarterly Inflation Report; these projections were specified in terms of retail price inflation in 2001:Q4 and in terms of consumer price inflation in 2004:Q1 and 2008:Q2. The hatched bars denote the distribution of 10-year-average projections for U.S. inflation, as measured by the consumer price index, in the quarterly Survey of Professional Forecasters conducted by the Federal Reserve Bank of Philadelphia (www.philadelphiafed.org/econ/spf). Each bar denotes the percent of forecasters whose projections fall within the specified interval.