Households’ Macroeconomic Beliefs: The Role of Education

Jessica Piccolo, Alessia Russo, Eleonora Granziera and Efrem Castelnuovo

No 12784, CESifo Working Paper Series from CESifo

Abstract: We design a novel survey to study how education shapes households' joint beliefs about inflation, unemployment, and monetary policy transmission. College-educated respondents perceive the inflation-unemployment trade-off and hold views similar to professional forecasters, while less educated respondents favor supply-side narratives. When exposed to hypothetical monetary policy interventions, the more educated update expectations and adjust consumption and saving in line with standard models, whereas the less educated display greater rigidity. This education gradient persists after controlling for information sources, financial literacy, and institutional trust, pointing to differences in abstract reasoning. Open-ended responses are consistent with college-educated households holding mental models aligned with standard macroeconomic theory.

Keywords: household expectations; education; mental models; monetary policy transmission; belief heterogeneity; survey data. (search for similar items in EconPapers)
JEL-codes: D83 D84 E31 E52 I21 (search for similar items in EconPapers)
Date: 2026
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