Does age matter in inflation uncertainty?

Chunping Zhong and Jiaxu Huo

Economics Letters, 2024, vol. 242, issue C

Abstract: This letter studies age-heterogeneous inflation uncertainty. We contrast two measures of uncertainty: The variance of the respondents' subjective belief distribution and the relatively objective rounding-based uncertainty. Inconsistency of two measures suggests that older individuals may underestimate inflation uncertainty while the young tend to overestimate it. This is further supported by the observation that older individuals have higher prediction errors. The research indicates a potential bias in subjective uncertainty assessments of different age groups.

Keywords: Inflation expectations; Uncertainty; Age-heterogeneous; Subjective probability distribution (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:242:y:2024:i:c:s0165176524003185

DOI: 10.1016/j.econlet.2024.111834

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