Can Expectation Management Policies Manage Inflation Expectations Or Not

How to effectively maintain the basic stability of the price and maintain a moderate level of inflation is a problem that the central banks of all countries generally need to think about.As we all know,inflation expectations have the characteristics of self realization,which is one of the key factors to determine the level of real inflation.The operation cost of expectation management is low,and the rapid spread of information can affect the public anticipation quickly.Therefore,the research on the expectation management policies have an important and forward-looking effect on the current development of China's monetary economy.Based on the new Keynes Phillips curve model,the variables that affect the inflation expectations are divided into three categories,and the expectation management policies of each stage of the central bank are measured by construction of the signal transmission index and the behavioral intervention index.By comparing the expectation management means at home and abroad,we find that there are some problems in our expectation management,such as lack of main body,lack of tools,and lack of smooth conduction and feedback mechanism.In addition,due to the heterogeneity of inflation expectations,we construct the expectations of residents and experts separately to measure the expectations of historical inflation.Further,we use the inflation expectation of the residents with smaller root mean square error to analyze the following parts.Then,we make a linear regression analysis on the inflation expectation and its key factors based on the model framework.The results show that the expectation management policies with the main mode of signal transmission and behavioral intervention have a certain impact on the inflation expectation,and inflation expectations have a certain degree of inertia.Separately,compared with the way of signal transmission,the expectation management policies with behavioral intervention as the main way have a more significant impact on China's residents,inflation expectations.Finally,we point out that China's expectation management policies need a comprehensive,lasting and profound transformation,which is a process of optimization,adjustment and upgrading.To smooth the transmission mechanism of monetary policies and cultivate sensitive market participants for policy and price signals is the only way for healthy development of our currency market.