Poor households report significantly higher inflation expectations than rich households. We assess, both theoretically and empirically, whether these differences are due to the recall of different shopping experiences and of information about aggregate inflation. Using data on shopping...

The paper investigates the role of expectations in the household credit cycle. First, I provide empirical evidence that survey data on expectations have strong predictive power for the dynamics of household debt. Optimism on future income predicts an increase in credit, in line with the...