I study how monetary and fiscal policy affect exchange rates, inflation expectations, and yield curve dynamics—bridging academic rigor with policy relevance.
Fabio Gómez‑Rodríguez is an Assistant Professor of Economics at Lehigh University’s College of Business. He studies how monetary policy and financial markets interact, with a focus on exchange rate pass‑through, inflation expectations, and yield curve dynamics. Fabio also collaborates with central banks, applying econometric models to real‑world policy questions.
Inflation is usually associated with rising prices. Positive inflation means that the cost of goods and services is going up. Another way to think about it is as a decline in the purchasing power of money—a dollar today buys less than it did before. While high inflation erodes wealth, a small amount is normal, even necessary, for a healthy economy.
Inflation expectations are what people believe will happen to prices in the future. Expectations can become self‑fulfilling: if many households and firms expect rising prices, demand can increase today, giving producers room to raise prices. In this video I discuss how changes in government spending and taxes can influence expectations and, in turn, the value of money.
In Costa Rica, there was a gap in the survey of inflation expectations between December 2020 and November 2021. We used functional time series (FTS) methods to reconstruct full distributions for the missing months—offering a more nuanced view than simple averages.