News on Inflation and the Epidemiology of Inflation Expectations
Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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News on Inflation and the Epidemiology of Inflation Expectations. / Pfajfar , Damjan; Santoro, Emiliano.
I: Journal of Money, Credit and Banking, Bind 45, Nr. 6, 2013, s. 1045–1067.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - News on Inflation and the Epidemiology of Inflation Expectations
AU - Pfajfar , Damjan
AU - Santoro, Emiliano
N1 - JEL Classification: C53;D84;E31
PY - 2013
Y1 - 2013
N2 - This paper examines the nexus between news coverage on inflation and households’ inflation expectations. In doing so, we test the epidemiological foundations of the sticky information model (Carroll ). We use both aggregate and household-level data from the Survey Research Center at the University of Michigan. We highlight a fundamental disconnection among news on inflation, consumers’ frequency of expectation updating, and the accuracy of their expectations. Our evidence provides at best weak support to the epidemiological framework, as most of the consumers who update their expectations do not revise them toward professional forecasters’ mean forecast.
AB - This paper examines the nexus between news coverage on inflation and households’ inflation expectations. In doing so, we test the epidemiological foundations of the sticky information model (Carroll ). We use both aggregate and household-level data from the Survey Research Center at the University of Michigan. We highlight a fundamental disconnection among news on inflation, consumers’ frequency of expectation updating, and the accuracy of their expectations. Our evidence provides at best weak support to the epidemiological framework, as most of the consumers who update their expectations do not revise them toward professional forecasters’ mean forecast.
KW - Faculty of Social Sciences
KW - inflation
KW - survey expectations
KW - news on inflation
KW - information stickiness
U2 - 10.1111/jmcb.12043
DO - 10.1111/jmcb.12043
M3 - Journal article
VL - 45
SP - 1045
EP - 1067
JO - Journal of Money, Credit and Banking
JF - Journal of Money, Credit and Banking
SN - 0022-2879
IS - 6
ER -
ID: 43214044