Inflation Expectations and Information Selection: Evidence from a Randomized Control Trial

Kento Tango, Junichi Kikuchi and Yoshiyuki Nakazono

No 62, TUPD Discussion Papers from Graduate School of Economics and Management, Tohoku University

Abstract: This study employs randomized control trial methods to explore how information selection and processing contribute to the heterogeneity in consumers’ inflation expectations. We find that, first, respondents vary in their preferences for inflation forecasts from established institutions. Second, providing credible information about future inflation helps stabilize expectations, with follow-up surveys indicating that this effect persists for at least one month. Third, respondents revise their expectations more extensively when provided with additional information. Fourth, respondents incorporate information more fully when they can choose the information they view. Individuals with exposure to interest rate risk are more likely to focus on relevant signals.

Pages: 54 pages
Date: 2025-01-23
New Economics Papers: this item is included in nep-exp and nep-mon
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https://hdl.handle.net/10097/0002003113

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Persistent link: https://EconPapers.repec.org/RePEc:toh:tupdaa:62

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