Economic Literacy and Inflation Expectations: Evidence from a Laboratory Experiment

Economic Literacy and Inflation Expectations: Evidence from a Laboratory Experiment

We present new experimental evidence on heterogeneity in the formation of inflation expectations and relate the variation to economic literacy and demographics. The experimental design allows us to investigate two channels through which expectations-formation may vary across individuals: (1) the choice of information and (2) the use of given information. Subjects who are more economically liter...

Imperfect Information and Inflation Expectations: Evidence from Microdata

We investigate the updating behavior of individual consumers regarding their shortand long-run inflation expectations. Utilizing the University of Michigan Survey of Consumer’s rotating panel microstructure, we can identify whether individuals adjust their inflation expectations over a period of six months. We find evidence that the updating frequency has been underestimated. Furthermore, looki...

Anchoring of Consumers' Inflation Expectations: Evidence from Microdata

In this paper we explore the degree of anchoring of inflation expectations of consumers by analysing the comovement in shortand long-run expectations. If inflation expectations are firmly anchored, a transitory shock should influence the short-run inflation expectations but not effect long-run inflation expectations. Utilizing the University of Michigan Survey of Consumer’s rotating panel micro...

RUHR ECONOMIC PAPERS Physician Performance Pay : Evidence from a Laboratory Experiment # 658

Inflation Expectations and Inflation Uncertainty in the Eurozone: Evidence from Survey Data

This paper uses the European Commission’s Consumer Survey to assess whether inflation expectations have converged and whether inflation uncertainty has diminished following the introduction of the Euro in Europe. Consumers’ responses to the survey suggest that inflation expectations depend more on past national inflation rates than on the ECB’s anchor for price stability. The convergence in inf...