SUBJECTIVE MODELS OF THE MACROECONOMY: EVIDENCE FROM EXPERTS AND A REPRESENTATIVE SAMPLE

Peter Andre, Carlo Pizzinelli, Christopher Roth and Johannes Wohlfart
Additional contact information
Carlo Pizzinelli: IMF
Johannes Wohlfart: CEBI, Department of Economics, University of Copenhagen

No 19-11, CEBI working paper series from University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI)

Abstract: Using a sample of 2,200 households representative of the US population and a sample of more than 1,000 experts, we measure beliefs about how aggregate unemployment and in ation respond to different macroeconomic shocks. Expert predictions are quantitatively close to standard DSGE models and VAR evidence. While households' beliefs are directionally aligned with those of experts in the case of oil supply shocks and government spending shocks, they predict an opposite reaction of in ation to monetary policy and income tax shocks. A substantial fraction of deviations of household predictions can be explained by the use of a simple affective heuristic.

Keywords: Expectation Formation; Subjective Models; Heuristics; Macroeconomic Shocks; Monetary Policy; Fiscal Policy (search for similar items in EconPapers)
JEL-codes: D83 D84 E31 E52 E71 (search for similar items in EconPapers)
Pages: 82 pages
Date: 2019-11-20
New Economics Papers: this item is included in nep-dge, nep-gen and nep-mac
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https://www.econ.ku.dk/cebi/publikationer/working-papers/CEBI_WP-11-19.pdf (application/pdf)

Related works:
Journal Article: Subjective Models of the Macroeconomy: Evidence From Experts and Representative Samples (2022)
Working Paper: Subjective Models of the Macroeconomy: Evidence From Experts and Representative Samples (2021)
Working Paper: Subjective Models of the Macroeconomy: Evidence from Experts and a Representative Sample (2021)
Working Paper: Subjective Models of the Macroeconomy: Evidence from Experts and Representative Samples (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kucebi:1911

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