I have been struck since joining the Governing Council that most of the measures of in ation expectations, particularly long term in ation expectations, are market-based, or surveys of professional forecasters. In contrast, what the public expects is much less well understood.
One measure of public perceptions is the dataset maintained by the European Commission, which shows that households believed that in ation in the euro area was approximately 9 per cent on average in the period between 2004 and 2018, when it was, in fact, 1.6 per cent (Cœuré 2019, Arioli 2017).21 Such misconceptions regarding macro and monetary phenomena are not limited to the euro area.