Fiscal Stimulus Plans and Households’ Expectations

Fiorella De Fiore, Marco Lombardi and Albert Pierres Tejada

No 20849, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We examine the impact of large U.S. fiscal stimulus plans on households’ expectations. We propose a measure of public attention to fiscal news during the legislative process based on Google Trends data and investigate how households’ expectations react when public attention is at its peak. Our findings reveal that attention peaks when a plan is approved by Congress or signed into law by the President. On these dates, financially literate households significantly adjust their expectations: inflation and earnings expectations increase, while unemployment expectations decline. Additionally, these households anticipate higher taxes when the government announces increased spending. We contrast these findings with the non-significant impact of monetary policy news on households’ expectations.

Keywords: Household expectations; Fiscal policy; Stimulus plan (search for similar items in EconPapers)
JEL-codes: D84 E63 E69 (search for similar items in EconPapers)
Date: 2025-11
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