Inflation uncertainty

Inflation uncertainty

The fact that future inflation rates are not known. It is a possible contributing factor to the makeup of the term structure of interest rates.

Inflation Uncertainty

The concept that the future inflation rate is unknowable. Inflation uncertainty is the reason that the yield curve on a bond (usually) trends upward. That is, investors expect extra compensation for accepting the possibility that inflation may outpace the yield on the bond.
References in periodicals archive ?
The uncertainty percentiles reflect an ordered ranking of inflation uncertainty outcomes; e.
Initiation of reforms on these fronts will reduce inflation uncertainty and restore a stable business environment.
2006: Inflation uncertainty, output growth uncertainty and macroeconomic performance.
Results of Heidari and Yengjeh (2010) suggest no significant relationship between inflation uncertainty and real growth.
Similarly, inflation uncertainty appears to affect variables such as output, employment and interest rates.
Incorporate past deviations in choosing future inflation targets: The most important payoff to announcing that future inflation targets will reflect past deviations from target is that it could lead to a reduction in medium- and long-horizon inflation uncertainty.
Stilianos Fountas (2010), "Inflation, inflation uncertainty and growth: Are they related?
The reasoning behind this argument lies in the fact that unanchored inflationary expectations can lead to a rise in both actual inflation and inflation uncertainty which may, in turn, prove costly for the economy by distorting the efficient allocation of resources.
inflation remains low, inflation uncertainty continues to be elevated.
Moreover, we assess the long- and short-run impacts of inflation uncertainty on real stock returns.
However, to ensure that our results concerning expected inflation are not driven by further instabilities in the empirical relationship between inflation and RPV, we will also account for breaks in the role of unexpected inflation and inflation uncertainty.
Second, there are prominent positive outliers for GDP growth, three of the first four of which occur in the first quarter of the year, likewise the positive inflation uncertainty revisions in 1997Q1 and 2000Q1.