This paper presents evidence that inflation expectations, as measured by the Michigan Survey of consumers, only play a minimal role in the propagation of real oil price shocks into inflation. This is despite evidence which confirms inflation expectations are sensitive to real oil price shocks. Further analysis exploring structural breaks suggest at some point after the mid-1990s, inflation expectations may have played no part in propagating real oil price shocks into inflation.
Wong, Benjamin (2015). ‘Do inflation expectations propagate the inflationary impact of real oil price shocks?: Evidence from the Michigan Survey’. Journal of Money, Credit and Banking, Wiley, Volume 47, Pages 1673-1689, DOI: https://doi.org/10.1111/jmcb.12288.