Narratives about the Macroeconomy

Peter Andre, Ingar Haaland, Christopher Roth and Johannes Wohlfart ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: 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. We measure economic narratives in open-ended survey responses and represent them as Directed Acyclic Graphs. We apply this approach in surveys with more than 8,000 US households and 100 academic experts. We document three main findings. First, compared to experts, households’ narratives are coarser, focus less on the demand side, and are more likely to feature politically-loaded explanations. Second, households’ narratives strongly shape their inflation expectations, which we demonstrate with descriptive survey data and a series of experiments. Third, an experiment varying news consumption shows that the media is an important source of narratives. Our findings demonstrate the relevance of narratives for understanding macroeconomic expectation formation.

Keywords: Narratives; Expectation Formation; Causal Reasoning; Inflation; Media; Attention. (search for similar items in EconPapers)
JEL-codes: D83 D84 E31 E52 E71 (search for similar items in EconPapers)
Pages: 96
Date: 2022-05
New Economics Papers: this item is included in nep-mac
References: Add references at CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
https://www.crctr224.de/research/discussion-papers/archive/dp350 (application/pdf)

Related works:
Working Paper: Narratives about the macroeconomy (2024)
Working Paper: Narratives about the Macroeconomy (2023)
Working Paper: Narratives about the Macroeconomy (2022)
Working Paper: Narratives about the Macroeconomy (2021)
Working Paper: Narratives about the Macroeconomy (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2022_350

Access Statistics for this paper

More papers in CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany Kaiserstr. 1, 53113 Bonn , Germany.
Bibliographic data for series maintained by CRC Office ().