Heterogeneity in consumers' economic expectations across euro area countries

Lena Dräger, Michal Marenčák, Giang Nghiem and Maritta Paloviita

No 6/2026, Bank of Finland Research Discussion Papers from Bank of Finland

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 countryspecific factors, highlighting the need for country-tailored monetary policy communication to effectively stabilize consumer expectations.

Keywords: Country heterogeneity; Expectations; Consumer Expectations Survey (search for similar items in EconPapers)
JEL-codes: D30 D84 E31 E52 (search for similar items in EconPapers)
Date: 2026
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https://www.econstor.eu/bitstream/10419/342404/1/1972891170.pdf (application/pdf)

Related works:
Working Paper: Heterogeneity in Consumers' Economic Expectations Across Euro Area Countries (2026)
Working Paper: Heterogeneity in Consumers' Economic Expectations across Euro Area Countries (2026)
Working Paper: Heterogeneity in consumers economic expectations across euro area countries (2026)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bofrdp:342404

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