Showing 1 - 10 of 13,221
This paper proposes a theory of the fiscal foundations of inflation based on imperfect knowledge and learning. The … theory is similar in spirit to, but distinct from, unpleasant monetarist arithmetic and the fiscal theory of the price level …
Persistent link: https://www.econbiz.de/10010202656
This paper studies the behaviors of uncertainty through the lens of several popular models of expectation formation. The full-information rational expectations model (FIRE) predicts that both the ex ante uncertainty and the variance of ex post forecast errors are equal to the conditional...
Persistent link: https://www.econbiz.de/10014475397
Survey data on inflation expectations show that: (i) private sector forecasts and central bank forecasts are not fully aligned and (ii) private sector forecasters disagree about inflation expectations. To reconcile these two facts we introduce dispersed information in a New Keynesian model,...
Persistent link: https://www.econbiz.de/10012981897
This paper examines the effects of policy rate announcements on households' inflation expectations over the time period 2003-2015. The effect is estimated using a two-stage least squares regression model. The announced changes are instrumented by a monetary policy surprise variable obtained from...
Persistent link: https://www.econbiz.de/10012207259
We provide evidence on narratives about the macroeconomy-the stories people tell to explain macroeconomic phenomena-in the context of a historic surge in inflation. In surveys with more than 10,000 US households and 100 academic experts, we measure economic narratives in open-ended survey...
Persistent link: https://www.econbiz.de/10015057525
This paper documents a strong relationship between households’ perceptions about inflation over the past 12 months and households’ short- and long-term expectations about future inflation. This relationship is strong during periods of high-inflation but even stronger during low-inflation...
Persistent link: https://www.econbiz.de/10014320795
Using a new consumer survey dataset, we show that macroeconomic preferences affect expectations and economic decisions through different channels. While household expectations are on average inversely related to preferences, households with the same inflation or interest rate expectations can...
Persistent link: https://www.econbiz.de/10013166152
Using a new consumer survey dataset, we study the role of macroeconomic preferences for expectations and economic decisions. While household expectations are inversely related to preferences, households with the same in ation expectations can differently assess whether the level of expected in...
Persistent link: https://www.econbiz.de/10012519950
This article analyses agents’ perception of the period of low inflation in recent years, in the context of a model in which these agents form their expectations on the basis of simple forecasting rules. The approach used allows a distinction to be drawn between which portion of the low...
Persistent link: https://www.econbiz.de/10013241253
We study the behavior of U.S. consumers' inflation expectations during the high inflation period of 2021-22 using data from the Survey of Consumer Expectations. Short- and, to a lesser extent, mediumterm inflation expectations rose as inflation surged in 2021. Disagreement and uncertainty about...
Persistent link: https://www.econbiz.de/10013441601