This paper investigates the relationship between short term and
long term ination expectations in the US and the UK with a focus
on ination pass through (i.e. how changes in short term expecta-
tions a¤ect long term expectations). An econometric methodology is
used which allows us to uncover the relationship between ination pass
through and various explanatory variables. We relate our empirical
results to theoretical models of anchored, contained and unmoored
ination expectations. For neither country do we …nd anchored or
unmoored ination expectations. For the US, contained ination ex-
pectations are found. For the UK, our …ndings are not consistent
with the speci…c model of contained ination expectations presented
here, but are consistent with a more broad view of expectations being
constrained by the existence of an ination target.
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