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横浜市立大学大学院国際マネジメント研究科

横浜市立大学大学院国際マネジメント研究科 教授
東北大学経済学研究科 客員教授

横浜市立大学大学院国際マネジメント研究科

Many central banks, including the Bank of Japan, define price stability as 2% inflation. Do households agree? We answer this question with a conjoint experiment in which Japanese respondents chose between hypothetical economies that differed in their inflation and unemployment rates. We find that households prefer zero inflation. An economy with 2% inflation is chosen significantly less often than one with 0% inflation. On average, respondents are indifferent between 0% and −2% inflation, although men and younger respondents prefer 0% to deflation. We also find that households weigh unemployment more heavily than inflation: for a one-percentagepoint fall in inflation, they accept a rise in unemployment of only about 0.65 percentage points. The results point to a gap between the inflation rate households prefer and the 2% that the Bank of Japan targets. This gap raises the possibility that the weak anchoring of Japanese households’ inflation expectations at 2% partly reflects their preference for inflation closer to zero.(JEL Classification: E31; E52; E58)