Inflation expectations and choices of households

Nathanaël Vellekoop and Mirko Wiederholt

No 250, SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE

Abstract: Do household in ation expectations affect consumption-savings decisions? We link survey data on quantitative in ation expectations to administrative data on income and wealth. We document that households with higher in ation expectations save less. Estimating panel data models with year and household fixed effects, we find that a one percentage point increase in a household's in ation expectation over time is associated with a 250-400 euro reduction in the household's change in net worth per year on average. We also document that households with higher in ation expectations are more likely to acquire a car and acquire higher-value cars. In addition, we provide a quantitative model of household-level in ation expectations.

Date: 2019
New Economics Papers: this item is included in nep-bec, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (68)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/196146/1/1664862439.pdf (application/pdf)

Related works:
Working Paper: Inflation Expectations and Choices of Households (2019)
Working Paper: Inflation Expectations and Choices of Households (2019)
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:zbw:safewp:250

DOI: 10.2139/ssrn.3383452

Access Statistics for this paper

More papers in SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().