EconPapers    
Economics at your fingertips  
 

Inflation Expectations and Risk Preferences

Lena Dräger, Maximilian Floto and Marina Schröder

Hannover Economic Papers (HEP) from Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät

Abstract: We provide evidence for biases in inflation expectations, where risk-averse households and experts report significantly higher prior inflation expectations. Using a survey randomized control trial (RCT), we can show that information about inflation forecasts closes this expectations gap. Our results are in line with a framework where risk averse agents seek to overestimate inflation in order to maximize future utility. We can show that biases in inflation expectations seem to be related to physical information avoidance, rather than biases in information processing.

Keywords: Inflation expectations; motivated beliefs; risk preferences; households; experts; survey experiment; randomized control trial (RCT) (search for similar items in EconPapers)
JEL-codes: D84 D90 E31 E52 (search for similar items in EconPapers)
Pages: 73 pages
Date: 2025-03
New Economics Papers: this item is included in nep-exp, nep-mon and nep-upt
References: Add references at CitEc
Citations:

Downloads: (external link)
https://diskussionspapiere.wiwi.uni-hannover.de/pdf_bib/dp-726.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:han:dpaper:dp-726

Access Statistics for this paper

More papers in Hannover Economic Papers (HEP) from Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät Contact information at EDIRC.
Bibliographic data for series maintained by Heidrich, Christian ().

 
Page updated 2025-03-30
Handle: RePEc:han:dpaper:dp-726