Heterogeneity in consumers economic expectations across euro area countries

Lena Draeger (), Michal Marencak (), Giang Nghiem () and Maritta Paloviita ()
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Lena Draeger: Leibniz University Hannover
Michal Marencak: National Bank of Slovakia
Giang Nghiem: Leibniz University Hannover
Maritta Paloviita: Bank of Finland

No WP 7/2026, Working and Discussion Papers from Research Department, National Bank of Slovakia

Abstract: This paper examines cross-country differences in consumer expectations about macroeconomic outcomes and mortgage borrowing conditions within a monetary union. Using harmonized microdata from the ECB Consumer Expectations Survey for eleven euro area countries, we document significant national disparities. By sequentially adding a rich set of consumer- and country-specific macro controls to pooled regressions with country fixed effects, we find that these factors account for much, but not all, of the cross-country heterogeneity in expectations. These remaining differences likely reflect unobserved country-specific factors, highlighting the need for country-tailored monetary policy communication to effectively stabilize consumer expectations.

JEL-codes: D30 D84 E31 E52 (search for similar items in EconPapers)
Pages: 80 pages
Date: 2026-06
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Persistent link: https://EconPapers.repec.org/RePEc:svk:wpaper:1141

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