In the modern economic landscape, inflation is not solely a monetary phenomenon driven by supply and demand, but is also shaped profoundly by human psychology and collective market sentiment. The expectations that consumers, businesses, and investors hold about future price changes can become a self-fulfilling prophecy, directly influencing wage demands and pricing decisions. Understanding this intricate interplay between economic fundamentals and behavioral factors is essential for central banks seeking to anchor expectations and for businesses and investors looking to navigate a volatile economic environment.

This program provides a rigorous and practical guide to the cutting-edge field of behavioral macroeconomics. Participants will gain a deep understanding of how cognitive biases, narrative economics, and emotional responses influence inflation dynamics and the effectiveness of monetary policy. The course will equip attendees with the tools to measure market sentiment and consumer expectations using both traditional and unconventional data sources, such as social media and news analysis. By integrating insights from psychology, finance, and economics, attendees will be empowered to make more informed decisions and to develop policy strategies that account for the human element in economic systems.

Duration: 10 days

Target Audience:

• Central Bank Economists and Researchers
• Financial Market Analysts and Strategists
• Behavioral Economists and Psychologists
• Public Policy Professionals
• Data Scientists and Analysts
• Journalists and Economic Reporters
• Risk Management Officers
• Academics and Educators
• Fund Managers and Investors
• Corporate Planners and Business Leaders

Objectives:

• Master the core theories of inflation expectations and their formation.
• Learn to identify and analyze key cognitive biases in economic decision-making.
• Understand the role of market sentiment in driving price movements and inflation.
• Grasp the complexities of measuring expectations using a variety of data sources.
• Develop proficiency in the use of behavioral models for macroeconomic forecasting.
• Explore best practices for central bank communication and forward guidance.
• Learn about robust methods for identifying and managing narrative-driven risks.
• Identify the critical legal and ethical issues related to data privacy.
• Develop skills in translating psychological insights into actionable policy.
• Formulate strategies for building a more resilient economic system.

Course Modules:

Module 1: The Foundations of Expectations

• The theory of rational vs. adaptive expectations
• The Lucas critique and its implications
• The role of a "clear and focused research question"
• The importance of a "risk and mitigation" plan
• The link between expectations and the Phillips Curve

Module 2: Cognitive Biases & Heuristics

• The concept of loss aversion and its impact on pricing
• The role of anchoring and availability biases
• The importance of a simple scorecard and a dashboard
• The use of mental accounting in household spending
• The impact of herd behavior on market trends

Module 3: Behavioral Models of Inflation

• Integrating behavioral insights into macroeconomic models
• The use of a "data story map"
• The challenges of modeling non-rational behavior
• The role of a "clear and consistent reporting style"
• The use of agent-based models

Module 4: The Measurement of Expectations

• Traditional survey-based measures of expectations
• The use of a program's theory of change
• Market-based measures from inflation-linked bonds
• The importance of a "stakeholder analysis"
• The challenges of measuring long-term expectations

Module 5: Sentiment & Narrative Economics

• The role of narratives in shaping economic outcomes
• The use of a clear and compelling KPI
• The impact of social media and news on market sentiment
• The importance of a "risk and mitigation" plan
• The concept of self-reinforcing feedback loops

Module 6: Textual Analysis & NLP

• The use of natural language processing (NLP) to measure sentiment
• The importance of a simple scorecard and a dashboard
• The use of news articles and earnings call transcripts
• The role of a "data story map"
• The challenges of a "clear and consistent reporting style"

Module 7: Central Bank Communication

• The role of communication in anchoring expectations
• The importance of a program's theory of change
• The impact of forward guidance on markets
• The challenges of communicating with a diverse public
• The role of a "stakeholder analysis"

Module 8: Inflation Psychology & Policy

• The psychological costs of high inflation
• The role of a clear and compelling KPI
• The impact of a "clear and focused research question"
• The use of behavioral nudges in policy design
• The role of a "risk and mitigation" plan

Module 9: Financial Markets & Sentiment

• The link between market sentiment and asset prices
• The importance of a simple scorecard and a dashboard
• The use of a "data story map"
• The impact of "animal spirits" on investment
• The role of a "clear and consistent reporting style"

Module 10: The Role of Social Networks

• The diffusion of narratives through social networks
• The importance of a program's theory of change
• The use of big data from social media
• The challenges of identifying influential agents
• The role of a "stakeholder analysis"

Module 11: The Policy Response

• The impact of a "clear and focused research question"
• The use of a "risk and mitigation" plan
• The role of a simple scorecard and a dashboard
• The use of a "data story map"
• The challenges of designing a policy in a behavioral world

Module 12: Behavioral Finance & Inflation

• The impact of inflation on household savings decisions
• The use of a "clear and consistent reporting style"
• The role of loss aversion in investment choices
• The importance of a program's theory of change
• The role of a "stakeholder analysis"

Module 13: Case Studies in Narrative Economics

• The role of a clear and compelling KPI
• The case of the Great Depression
• The use of a "clear and focused research question"
• The impact of a "risk and mitigation" plan
• The role of a simple scorecard and a dashboard

Module 14: The Future of Expectations

• The role of artificial intelligence and machine learning
• The use of a "data story map"
• The future of central bank communication
• The importance of a "clear and consistent reporting style"
• The role of a "program's theory of change"

Module 15: Ethical Considerations

• The ethics of using behavioral insights for policy
• The importance of a "stakeholder analysis"
• The challenges of data privacy
• The use of a clear and compelling KPI
• The role of a "clear and focused research question"

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 10 working days before commencement of the training.