In 2021, the Bank of Japan (BoJ) released a paper, supporting their newly minted measure of inflation – the Price Sentiment Index (PSI). Breaking away from a long-standing tradition, the BoJ turned to alternative data as a way to forecast (or, in some sense, nowcast) inflation. While we have yet to receive any data on its reliability as it has been originally proposed only in 2018, the Price Sentiment Index seems to be a promising invention in a field where they may come few and far between. Surprisingly, the data collection process for PSI isn’t all that complicated. It may……
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