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same inflation or interest rate expectations can differently assess whether the level of the corresponding variable is … and affects durable spending and saving decisions. We also show that the variation in inflation preferences can be …
Persistent link: https://www.econbiz.de/10013293855
We examine partisan bias in inflation expectations. Our dataset includes inflation expectations of the New York Fed …'s Survey of Consumer Expectations over the period June 2013 to June 2018. The results show that inflation expectations were 0 …. Compared to inflation expectations in Democratic-dominated states, inflation expectations in Republican-dominated states …
Persistent link: https://www.econbiz.de/10012860297
Macroeconomic uncertainty affects the subjective distribution of individual expectations. Using four panel datasets, we document the effects of macro uncertainty on the mean expectation (first moment) and subjective uncertainty (second moment) of income forecasts. We find that macro uncertainty...
Persistent link: https://www.econbiz.de/10013309488
This paper investigates the heterogeneity of monetary policy transmission under time-varying disagreement regimes using a threshold VAR. Empirically, I establish that during times of high disagreement, prices respond more sluggishly in response to monetary shocks. These stickier prices cause a...
Persistent link: https://www.econbiz.de/10012858703
estimating a smooth transition regression model with different inflation expectations regimes for five inflation targeting …) respectively over the period January 1993-August 2021. Both market and survey measures of inflation expectations are used as the … expectations of both consumers and producers are considered instead of expectations from consumer surveys only. Finally, inflation …
Persistent link: https://www.econbiz.de/10013306953
We estimate a three-variate VAR using proxies of global financial uncertainty, the global financial cycle, and world industrial production to simulate the effects of the jump in financial uncertainty observed in correspondence of the Covid-19 outbreak. We predict the cumulative loss in world...
Persistent link: https://www.econbiz.de/10012834352
We estimate a Heterogeneous-Agent New Keynesian model with sticky household expectations that matches existing microeconomic evidence on marginal propensities to consume and macroeconomic evidence on the impulse response to a monetary policy shock. Our estimated model uncovers a central role for...
Persistent link: https://www.econbiz.de/10012842965
We propose a heuristic switching model of an asset market where the agents' choice of heuristic is consistent with their individual risk aversion. They choose between a fundamentalist and a trend-following rule to form expectations about the price of a risky asset. Given their risk aversion,...
Persistent link: https://www.econbiz.de/10012844420
We consider an expanded notion of social norms that renders them belief-dependent and partial, formulate a series of related testable predictions, and design an experiment based on a variant of the dictator game that tests for empirical relevance. Main results: Normative beliefs influence...
Persistent link: https://www.econbiz.de/10012889682
We study a segmented-markets setting in which self-fulfilling volatility can arise. The only requirements are (i) asset price movements redistribute wealth across markets (e.g., equities rise as bonds fall) and (ii) some stabilizing force keeps valuation ratios stationary (e.g., cash flow growth...
Persistent link: https://www.econbiz.de/10012825392