Households often struggle to understand policy interventions, limiting the effectiveness of policy transmission. We study how economic policy signals reach and influence households, focusing on the role of professional economists as interpretive intermediaries. When policy signals are complex...

Using survey data from Austrian households, this paper examines how personality traits influence households' inflation expectations. We measure the Big Five personality traits and show they explain 70 % more of the differences in expectations than sociodemographic factors like age and income...

We measure which economic topics are top of mind using quarterly German household and firm panels from 2020 to 2024, a period that spans the post-pandemic inflation surge and the subsequent disinflation. With these data, we study the determinants and consequences of having inflation top of mind....

We study how consumers form and revise inflation expectations using a unique, highly balanced monthly panel of Dutch households. We develop a Bayesian framework that nests Full-Information Rational Expectations (FIRE) alongside common forecasting heuristics and test it by recovering...

Professional inflation forecasts contain valuable information but exhibit information frictions. We extract improved forecasts by explicitly modeling these frictions using the US Survey of Professional Forecasters data, and find that forecast rigidity increases systematically with horizon,...

This paper examines the persistent upward bias in euro area households' inflation perceptions and expectations, even when realized inflation is near the ECB's target. It discusses behavioural and informational drivers of this bias, its implications for consumption, wage setting, and monetary...

We study why inflation responds differently to economic activity over time. Using survey data covering the universe of Japanese firms, we show that firms are unable to perfectly distinguish aggregate from sector-specific demand changes, leading to positively correlated expectations about these...

This paper studies how lifetime inflation exposure shapes individuals' inflation expectations, perceptions, and financial behavior. Using a large individual-level dataset from Türkiye spanning 2014 to 2024, combined with detailed measures of past inflation experiences, we show that individuals...

This paper studies the response of inflation expectations to an exogenous shift in central bank preferences. We use the unexpected announcement of the resignation of Jens Weidmann, the president of the Deutsche Bundesbank, in 2021 as a natural experiment constituting a rare case of an exogenous...

We identify desirable/undesirable inflation outcomes under subjective beliefs by comparing surveybased and risk-adjusted distributions of inflation. Intuitively, investors dislike inflation at both extremes, preferring a range in the middle. This "good inflation" region, which investors...

Policymakers often cite the risk that inflation expectations might "de-anchor" as a key reason for responding forcefully to inflationary shocks. We develop a model to analyze this trade-off and to quantify the benefits of stable long-run inflation expectations. In our framework, households and...

We study how inflation expectations can be anchored through different forms of communication and whether such anchoring survives political change. Using a two-wave panel RCT around the 2025 German federal election, we show that providing the ECB's target and projections lowers expectations by...

Central bank surveys frequently elicit households’ probabilistic beliefs about future inflation by employing response scales centered around zero inflation. Analyzing data from the high-inflation period of 2022/2023, we demonstrate how this practice leads to distortions in households'...

We document novel stylized facts regarding updating of households’ inflation expectations. Using two randomized controlled trials fielded in the US and Germany where signals in the form of professionals’ inflation forecasts have different perceived levels of precision, we show that...

This work highlights a previously overlooked factor that contributes to bias in private inflation forecasts-ignorance of confidential monetary rules. Additionally, it examines how this ignorance indirectly affects policy rate settings. The model proposed reconciles biases in two key forecast...

This paper introduces a novel TV news index specifically designed to track coverage of rising inflation across major US TV channels: ABC, CBS, CNN, and Fox News. The index is generated daily and aggregated into a monthly measure. Using this index, we analyze the impact of TV news on inflation...