The impact of news on US household inflation expectations

Analysis of monthly disaggregated data from 1978 to 2016 on US household in ation expectations reveals that exposure to news on in ation and monetary policy helps to explain in ation expectations. This remains true when controlling for household personal characteristics, their perceptions of the e ectiveness of government policies, their expectations of future interest rates and unemployment, and their sentiment levels. We nd evidence of an asymmetric impact of news on in ation expectations particularly after 1983, with news on rising in ation and easier monetary policy having a stronger e ect in comparison to news on lowering in ation and tightening monetary policy.

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Year of publication:	2017
Authors:	Chao, Shih-Kang ; Härdle, Wolfgang Karl ; Sheen, Jeffrey R. ; Trück, Stefan ; Wang, Ben Zhe
Publisher:	Berlin : Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk
Subject:	Inflation expectations \| news impact \| forecast disagreement

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Series:	SFB 649 Discussion Paper ; 2017-011
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	889536872 [GVK] hdl:10419/169201 [Handle] RePEc:hum:wpaper:sfb649dp2017-011 [RePEc]
Classification:	D83 - Search, Learning, Information and Knowledge ; D84 - Expectations; Speculations ; E31 - Price Level; Inflation; Deflation
Source:	EconStor

Persistent link: https://www.econbiz.de/10011725378