The analysis is founded on the lender of Italy’s Survey of Inflation and Growth Expectations, which runs on the sample around 1,000 industrial and service firms with at least 50 employees. The Survey has been conducted quarterly since 1999 and specifically collects firms’ point inflation expectations at several time horizons (Bank of Italy 2018).
Evidence on the inflation expectations of firms
In Italy, the inflation expectations formulated by firms have already been broadly consistent with those reported by professional forecasters (Figure 1). Differences are unlikely to reflect too little relevant information on the firms’ side because, because the start of the survey in 1999, respondents were given the newest inflation reading in Italy and in the euro area before these were surveyed. The difference around a half percentage point in the first portion of the period probably reflects different levels of learning about the brand new monetary framework.