paul burkett wrote: > > I would like to lodge a general info request, concerning whether anyone knows > of any articles that documents differences in expectations of inflation > between workers and capitalists (or as a second best, among different income > groups). Please respond to me personally, so as not to clutter up the network. > Thanks a Lot. Paul Burkett > ecburke@indst > Paul's question brings to mind another issue I've been wrestling with about "inflationary expectations" and that relates to the REAL interest rate. By convention, an awful lot of time-series' on the real interest rate uses a 12 (or nine) quarter average to estimate the "expected rate of inflation" which then is subtracted from the actual interest rate in question ---. I, myself, have always believed that the EX POST real interest rate (prime or FFR less the experienced rate of inflation) is more useful because it explains the actual impact of the real world on borrowers and lenders rather than the (presumed) reasoning of the borrowers and lenders as they "arrive" at an acceptable interest rate. This latter method of formulation has always bothered me, because those decision-makers that attempt to estimate the impact of "inflation" on their particular situation will be much more interested, not in some "general" measure of inflation but on the specific prices they have to pay for their specific inputs and the specific price=trajectory they can predict for their specific products. WHILE lenders might be interested in some sense in the (general) rate of inflation --- they are even more interested in the SPREAD. Thus, I have to confess, I've always been a bit leery of using the "expectations" or EX ANTE real interest rate as opposed to the EX POST one. BTW, I would be interested in any references people have in response to Paul's query -- In general I think requests for references ought to be sent to the list because many other people are probably interested in the same questions that are asked. I'd be curious as to what people think about the two alternative ways of measuring the real interest rate --- (note, of course, the rational expectations folks would insist that recent experience in NO WAY predicts the expected price of ANYTHING!) All the best, Mike -- Mike Meeropol Economics Department Cultures Past and Present Program Western New England College Springfield, Massachusetts "Don't blame us, we voted for George McGovern!" Unrepentent Leftist!! [EMAIL PROTECTED] [if at bitnet node: in%"[EMAIL PROTECTED]" but that's fading fast!]
