The role of information and experience for households' inflation expectations

Christian Conrad, Zeno Enders and Alexander Glas

No 20, Working Papers from German Research Foundation's Priority Programme 1859 "Experience and Expectation. Historical Foundations of Economic Behaviour", Humboldt University Berlin

Abstract: Based on a new survey of German households, we investigate the role of information channels and lifetime experience for households' inflation expectations. We show that the types of information channels that households use to inform themselves about monetary policy are closely related to their socio-economic characteristics. These information channels, in turn, have an important influence on the level of perceived past and expected future inflation, as well as uncertainty thereof. The expected future change of inflation and the unemployment rate, however, is strongly influenced by individual experience of these variables. Similarly, the expected response of inflation to a change in the interest rate is also shaped by experience. We propose the interpretation that households obtain inflation numbers from the media, but their 'economic model' is shaped by experience.

Keywords: household expectations; inflation expectations; information channels; experience; Bundesbank household survey (search for similar items in EconPapers)
JEL-codes: D84 E31 E71 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-mac and nep-mon
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: The role of information and experience for households’ inflation expectations (2022)
Working Paper: The role of information and experience for households' inflation expectations (2021)
Working Paper: The role of information and experience for households' inflation expectations (2021)
Working Paper: The Role of Information and Experience for Households' Inflation Expectations (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:pp1859:20

DOI: 10.18452/21833

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