EconPapers    
Economics at your fingertips  
 

Institutions, experiences and inflation aversion

Michael Berleman () and Sören Enkelmann ()
Additional contact information
Michael Berleman: Helmut Schmidt University, Hamburg, Postal: Holstenhofweg 85, 22043 Hamburg, Germany

No 143/2014, Working Paper from Helmut Schmidt University, Hamburg

Abstract: Are preferences exogenously given? Or do individual tastes and values evolve endogenously within a particular socio-economic environment? In this paper, we make use of a natural experiment to analyse the role of inflation experiences and institutions in the formation of individual inflation preferences. In particular, we exploit the division of post-war Germany to investigate to what extent the factual non-experience of inflation and 40 years of Communism have affected inflation preferences in East and West Germany. We find that historical experiences have a significant and long-lasting effect on people's preferences. Due to their specific political and economic background, East Germans are significantly more inflation averse than West Germans, even 20 years after reunification.

Keywords: endogenous preferences; inflation aversion; natural experiment; Germany (search for similar items in EconPapers)
JEL-codes: E02 E31 P22 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2014-05-15
New Economics Papers: this item is included in nep-his, nep-mac, nep-mon and nep-upt
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.hsu-hh.de/fgvwl/index_RHYSo40hz43lxlVS.html Full text (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:ris:vhsuwp:2014_143

Access Statistics for this paper

More papers in Working Paper from Helmut Schmidt University, Hamburg Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Bekcmann ().

 
Page updated 2021-07-17
Handle: RePEc:ris:vhsuwp:2014_143