Inflation Expectations of the General Public under Supply Constraints: Evidence from a Survey Experiment

Dzung Bui () and Bernd Hayo
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Dzung Bui: Philipps-Universität Marburg, Marburg Center for Institutional Economics and Sustainability (MACIES)

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: This paper examines the causal effect of supply constraints on inflation expectations, using a survey experiment conducted with a representative sample of German adults. Respondents first reported their prior beliefs about both official and personal inflation. They were then presented with information about Germany's 2022 supply bottlenecks and randomly assigned to one of three hypothetical scenarios for 2025. Exposure to either shortage scenario significantly increased the likelihood of revising inflation expectations. Personal exposure to supply shortages in daily life and financial literacy also influenced how respondents revised expectations. A topic analysis of open-ended responses provides further insights into how people interpret and react to perceived product scarcity.

Keywords: Inflation expectation; Supply shortages; Survey experiment; Germany (search for similar items in EconPapers)
JEL-codes: D12 D83 D84 E31 E71 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2025
New Economics Papers: this item is included in nep-exp, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:202520

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