The development of economics and empirical studies indicate to a significant role of expectations - including inflation expectations - in macroeconomic relations. Three interrelated premises for central banks' interest in the issue of inflation expectations may be identified. Firstly, the expectations constitute one of the factors that may determine market behaviour insofar as consumption, savings, wage trade-off, etc., and thus indirectly influence the price processes in the economy. Depending on the strength of the impact of central bank's interest rates changes on inflation expectations, these may become a significant gear in the mechanism of transmission of the monetary policy impulses. Secondly, to the extent to which they are an independent determiner of future price developments, they may be a valuable source of information to be used in anticipation analyses, e.g. in macroeconomic forecasts that provide foundations for the decisions of monetary authorities. Thirdly, inflation expectations of various groups of economic agents (consumers, enterprises, the financial sector) are a measurement of central bank's credibility, and they determine the degree of conviction as to the possible achievement of its statutory objective, i.e. price stability. This is especially important in the direct inflation target regime.
With the introduction of the direct inflation target strategy in Poland in 1998, the National Bank of Poland has developed research on inflation expectations. As regards inflation expectations of private individuals, methods of quantification of inflation expectations on the basis of survey data were developed. The resultant indicators were then used in assessment of the nature of inflation expectations in this group of agents, and in comparison of inflation expectations of private individuals in Poland and in the euro area. The quantified measures of inflation expectations of private individuals were also included in the macroeconometric models applied at the NBP.
The importance of the issue in modern macroeconomics has made the National Bank of Poland organize an international workshop on inflation expectations. The workshop aims to establish a platform for the discussion and sharing experience for the representatives of central banks and the members of academic community, regarding measurement of economic agents' expectations, the methods of formulating those expectations and the role they play in economic processes. The topics of particular presentations and the discussion panel to be held at the end of the workshop should provide a response to the question about the application of information on inflation expectations in macroeconomic modelling and in monetary policy making by modern central banks.