A systematic literature review of the implications of media on inflation expectations

Inflation expectations are critical in monetary economics. It could affect the policy outcome as economic agents’ responses to a monetary policy partially depend on the economic expectations. This systematic literature review discusses the impact of media on various aspects of inflation expectation, especially inflation forecasts and their errors, updating behaviour, and disagreement in inflation expectations. Using the PRISMA procedure on two academic databases from 2000 to February 2023, 65 journal articles were analysed. After discussing the research framework and research characteristics, the analysed papers are discussed from three perspectives: methodology, media measurement, and topic coverage. The findings suggest that these papers applied quantitative and qualitative analysis techniques, especially the former. Besides, different media sources have been collected, mostly from newspapers and surveys. Different data processing steps are applied to extract the related information for estimation from these sources. Next, the paper presented could be grouped into theoretical formation and empirical evidence of different media perspectives’ influence on inflation expectation. The empirical studies have offered mixed empirical evidence on the implications of media. This paper ends with six recommendations for future research.