Household Inflation Expectations Fail to Influence Wage-Price Dynamics in India
Household inflation expectations in India are not always accurate, but they can still help predict future inflation. Survey data shows that short-term expectations can influence inflation, but they mainly reflect past trends. However, these expectations do not strongly impact wages and prices. Food and fuel price changes have a bigger effect on household inflation expectations. Overall, while household expectations may not directly affect inflation, it's important for monetary policy to keep inflation expectations stable.