Journal Press India^®

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This paper studies micro-level data from the Reserve Bank of India’s ‘Inflation Expectations Survey of Households’ with a nuanced focus on socio-demographics of gender, age, occupation, and city of residence. We document inflation expectations and perceptions relating to this representative sample from four distinct Indian cities, with an intercity comparison shaping the heart of our research. Our study reveals that women, younger respondents, financial sector employees, other category employees as well as cities from higher GSDP states have a more insightful understanding of inflation trends and are more accurate in their inflation rate deductions. Periods of economic un-certainty and volatility are marked with a conspicuous upward bias, polarisation, and inaccuracy in household inflation beliefs. Important policy recommendations are highlighted in our paper as well. This has strong implications with regards to helping central banks and policymakers in their decision-making processes.

Keywords

IESH, Inflation expectations; Economic uncertainty; Demographics.

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