ECB’s de Guindos: Survey Data Helped Us Understand Likely Persistence of 2022 Inflation Shock

1 October 2024

By Marta Vilar – MADRID (Econostream) – European Central Bank Vice President Luis de Guindos said on Tuesday that survey data provided important insights for the ECB, citing the inflation shock beginning in 2022 as an example.

Speaking at the 5th joint ECB, Bank of Canada and Federal Reserve Bank of New York conference on expectations surveys, central banks and the economy, de Guindos said that ‘during the early phase of the inflation surge in 2022, survey data helped to inform the central discussion on the likely persistence of the shock’.

Central banks operate under great uncertainty amid economic, financial and geopolitical risks, he said, and surveys help deal with unpredictability and complexity.

‘[W]hile models based on rational expectations still form a useful reference point in our analysis and research, they are no longer thought to provide a solid basis for understanding business cycles, for gauging the risks of financial crises or for designing effective economic policies’, he said.

Understanding subjective expectations is of utmost importance because they often underlie economic choices and financial decisions that drive the economy, according to de Guindos