Yes, they would. In a randomized control trial, we provide groups of respondents from the Bundesbank Online Panel Households with information about a hypothetical alternative ECB monetary policy regime akin to the Federal Reserve's flexible average inflation targeting (AIT). Inflation expectations significantly increase for the treated individuals. When provided with additional assumptions about current inflation, individuals update their expected inflation path in line with the central banks' intentions. Individuals with a high trust in the ECB's ability to achieve price stability adjust their inflation expectations particularly strongly. We assess the economic significance of our findings by comparing two model economies under different monetary policy strategies, calibrated to match the difference in medium-term inflation expectations from our survey results. Inflation is substantially less volatile and the frequency of hitting the lower bound of interest rates considerably reduced under AIT.

Several recent surveys ask for a person's subjective probabilities that the in- ation rate falls into various outcome ranges. We provide a new measure of the uncertainty implicit in such probabilities. The measure has several advantages over existing methods: It is trivial to implement, requires no functional form assumptions, and is well-defined for all logically possible probabilities. From a theoretical viewpoint, the measure can be motivated as the entropy function of a strictly proper scoring rule. We demonstrate the measure's good performance in a simulation study based on empirical data from the Survey of Consumer Expectations.

We study how households adjust their medium-term inflation expectations under the new monetary policy strategy of the ECB. In a representative sample of 7,500 participants of the Bundesbank Online Panel Households, we find that survey respondents make little difference between the previous strategy of targeting inflation rates close to but below 2% and the new strategy with a symmetric 2% target. Yet, when informed that the ECB would tolerate a potential overshooting of inflation following prolonged negative deviations from the inflation target, households report significantly higher inflation expectations. These effects are more pronounced among individuals reporting some prior knowledge about the ECB's new inflation target and those with higher trust in the ECB's ability to achieve price stability.