The role of information and experience for households' inflation expectations
Glas A, Conrad C, Enders Z (2022)
Publication Language: English
Publication Type: Journal article
Publication year: 2022
Journal
Book Volume: 143
Pages Range: 104015
URI: https://www.sciencedirect.com/science/article/pii/S001429212100283X
DOI: 10.1016/j.euroecorev.2021.104015
Open Access Link: https://www.sciencedirect.com/science/article/pii/S001429212100283X
Abstract
Based on a new survey of German households, we investigate the role that information channels and lifetime experience play in households’ inflation expectations. We show that the types of information channels that households use to inform themselves about monetary policy are closely related to their socioeconomic characteristics. These information channels, in turn, have a major influence on the level of perceived past and expected future inflation, as well as on the uncertainty thereof. The expected future change in inflation and the unemployment rate, however, is strongly influenced by individual experience of these variables. Similarly, the expected response of inflation to a change in the interest rate is also shaped by experience. We propose the interpretation that households obtain inflation numbers from the media, but their ‘economic model’ is shaped by experience.
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APA:
Glas, A., Conrad, C., & Enders, Z. (2022). The role of information and experience for households' inflation expectations. European Economic Review, 143, 104015. https://dx.doi.org/10.1016/j.euroecorev.2021.104015
MLA:
Glas, Alexander, Christian Conrad, and Zeno Enders. "The role of information and experience for households' inflation expectations." European Economic Review 143 (2022): 104015.
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