According to a standard principle in free speech law, the remedy for falsehoods is "more speech," not enforced silence. But empirical research demonstrates that corrections of falsehoods can actually backfire, by increasing people's commitment to their inaccurate beliefs, and that presentation...

Inflation expectations are key to economic activity, and in the current economic climate of a heated labor market, they are central to the policy debate. At the same time, a growing literature on inattention suggests that individuals, and therefore individual behavior, may not be sensitive to...

Using three waves of a customised survey among Dutch households, this paper studies the variation in people's views on inflation. Based on a range of panel regressions, we find that accurate perceptions of recent price changes are an important determinant of the accuracy of next-year inflation...

Analysis of monthly disaggregated data from 1978 to 2016 on US household in ation expectations reveals that exposure to news on in ation and monetary policy helps to explain in ation expectations. This remains true when controlling for household personal characteristics, their perceptions of the...

Why are some people more optimistic about their life than others? Literature on locus of control suggests that optimism is associated with the belief that one’s life outcomes are controlled by internal factors, such as ability, instead of external factors, such as powerful others or chance....

Using the panel component of the Michigan Survey of Consumers, we show that individuals, in particular women and ethnic minorities, are highly heterogeneous in their expectations of inflation. We estimate a model of inflation expectations based on learning from experience that also allows for...

This paper studies if workers infer from correlation about causal effects in the context of the part-time wage penalty. Differences in hourly pay between full-time and part-time workers are strongly driven by worker selection and systematic sorting. Ignoring these selection effects can lead to...

Analysis of monthly disaggregated data from 1978 to 2016 on US household inflation expectations reveals that exposure to news on inflation and monetary policy helps to explain inflation expectations. This remains true when controlling for household personal characteristics, their perceptions of...

Standard program evaluations implicitly assume that individuals are perfectly informed about the considered policy change and the related institutional rules. This seems not very plausible in many contexts, as diverse examples show. However, evidence on how incomplete information affects the...

We leverage survey data from Germany, Italy, and the US to document several novel stylized facts about the extent of information frictions among firms and households. First, firms’ expectations about the central bank policy rate, inflation, and aggregate unemployment are more aligned with...