Macroeconomic Expectations and Credit Card Spending

Misha Galashin, Martin Kanz () and Ricardo Perez-Truglia

No 28281, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine how macroeconomic expectations affect consumer decisions, using an experiment with 2,872 credit card customers at a large commercial bank. In the experiment, participants are randomized into receiving expert forecasts of inflation and the nominal exchange rate. We find that forecasts significantly affect inflation and exchange rate expectations, but do not change spending or self-reported consumption plans as predicted by standard models of intertemporal choice. Results from a supplementary survey experiment suggest that consumers are sophisticated enough to anticipate nominal rigidities and reduce spending on durables for precautionary reasons, counteracting the effects predicted by standard models of intertemporal optimization.

JEL-codes: C81 C93 D83 D84 E03 E31 (search for similar items in EconPapers)
Date: 2020-12
New Economics Papers: this item is included in nep-exp, nep-mac and nep-mon
Note: IFM
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Citations: View citations in EconPapers (7)

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Working Paper: Macroeconomic Expectations and Credit Card Spending (2021)
Working Paper: Macroeconomic Expectations and Credit Card Spending (2021)
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