 How Does Consumption Respond to News about Inflation? Field Evidence from a Randomized Control TrialOlivier Coibion, Dimitris Georgarakos, Yuriy Gorodnichenko and Maarten van Rooij American Economic Journal: Macroeconomics, 2023, vol. 15, issue 3, 109-52 Abstract: We implement a survey of Dutch households in which random subsets of respondents receive information about inflation. The resulting exogenously generated variation in inflation expectations is used to assess how expectations affect consumption decisions. The causal effects of reduced inflation expectations on nondurable spending are imprecisely estimated, but there is a sharp positive effect on durable spending. This is likely driven by the fact that Dutch households seem to become more optimistic about their real income and aggregate spending when they decrease their inflation expectations. We find little role for cognitive or financial constraints in explaining spending responses. JEL-codes: C83 D12 D83 D84 E21 E31 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:aea:aejmac:v:15:y:2023:i:3:p:109-52 Ordering information: This journal article can be ordered from DOI: 10.1257/mac.20200445 Access Statistics for this article American Economic Journal: Macroeconomics is currently edited by Simon Gilchrist More articles in American Economic Journal: Macroeconomics from American Economic Association Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.