Households Forming Inflation Expectations: Who Are the 'Active' and 'Passive' Learners?

J. Easaw J. and Roberto Golinelli

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: Recent research has established that households learn from professional forecasters as they form their inflation expectations. Professionals forecasts are transmitted, or absorbed , throughout the population slowly but eventually. This provides the microfoundations for sticky information expectations . The present paper considers whether absorption rates take place heterogeneously amongst households. We consider whether various segments of the population absorb the professional s forecasts at different rates. Using a unique survey-based dataset covering various segments of the UK population we identify active and passive learners in the population. Active and passive learners are identified and distinguished by their respective absorption rates. The present analyses also consider whether these absorption rates are non-linear.

Date: 2009-08
New Economics Papers: this item is included in nep-cba and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:675

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