Monetary policy in Uruguay impacts inflation expectations at the micro level.
The article examines how monetary policy affects inflation expectations in Uruguay using a survey of firms from 2009 to 2013. The researchers found that monetary policy has a negative impact on inflation expectations. Past inflation changes influence expectations, while exchange rate changes have less impact. There is a connection between inflation expectations and expected economic activity, possibly due to past monetary crisis experiences. Surprisingly, there is no clear link between firm inflation expectations and expert assessments by the Central Bank.