News on Inflation and the Epidemiology of Inflation Expectations.

Material TypeArticleLanguageEnglish
TitleNews on Inflation and the Epidemiology of Inflation Expectations. Author(S)DAMJAN. PFAJFAR, (Author)
Abstract  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. ...Paginationp 1045-1068
SubjectEconomicsDescriptorsBanks and banking
Journal TitleJournal of Money, Credit, and Banking  
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