Attention to the Macroeconomy

Sebastian Link, Andreas Peichl, Oliver Pfäuti, Christopher Roth and Johannes Wohlfart ()
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Johannes Wohlfart: University of Cologne, Max-Planck Institute for Behavioral Economics Bonn, CEBI, CESifo

No 256, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: We measure which economic topics are top of mind using quarterly German household and firm panels from 2020 to 2024, a period that spans the post-pandemic inflation surge and the subsequent disinflation. With these data, we study the determinants and consequences of having inflation top of mind. In line with goal-directed attention, the likelihood that inflation is top of mind rises with proxies for its true payoff relevance. At the same time, prior experiences predict whether respondents have inflation and energy prices top of mind conditional on a large set of controls for payoff relevance, and this relationship becomes stronger when the environment becomes more inflationary. Having inflation top of mind predicts stronger increases in information acquisition and inflation expectations over the shock period. At odds with goal-optimality, having inflation top of mind is associated with expectations further away from multiple ex-ante benchmarks. Finally, both key determinants of having inflation top of mind—payoff relevance and prior experiences—are associated with stronger shifts of expectations away from these benchmarks over the shock period.

Keywords: Attention; Expectation formation; Memory; Experiences; Inflation (search for similar items in EconPapers)
JEL-codes: D83 D84 E71 (search for similar items in EconPapers)
Pages: 94 pages
Date: 2023-09
New Economics Papers: this item is included in nep-ger and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_256_2023.pdf Fifth version, 2026 (application/pdf)

Related works:
Working Paper: Attention to the Macroeconomy (2025)
Working Paper: Attention to the Macroeconomy (2024)
Working Paper: Attention to the Macroeconomy (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ajk:ajkdps:256

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