Consumer Attitudes and Their Inflation Expectations

TY - JOUR

T1 - Consumer Attitudes and Their Inflation Expectations

AU - Ehrmann, Michael

AU - Pfajfar, Damjan

AU - Santoro, Emiliano

PY - 2017/2

Y1 - 2017/2

N2 - This paper studies consumers’ inflation expectations using micro-level data from the University of Michigan’s Surveys of Consumers. It shows that beyond the well-established socioeconomic factors such as income, age, or gender, inflation expectations are also related to respondents’ financial situation, their purchasing attitudes, and their expectations about the macroeconomy. Respondents with current or expected financial difficulties and those with pessimistic attitudes about major purchases, income developments, or unemployment have a stronger upward bias than other households. However, their bias shrinks by more than that of the average household in response to increasing media reporting about inflation.

AB - This paper studies consumers’ inflation expectations using micro-level data from the University of Michigan’s Surveys of Consumers. It shows that beyond the well-established socioeconomic factors such as income, age, or gender, inflation expectations are also related to respondents’ financial situation, their purchasing attitudes, and their expectations about the macroeconomy. Respondents with current or expected financial difficulties and those with pessimistic attitudes about major purchases, income developments, or unemployment have a stronger upward bias than other households. However, their bias shrinks by more than that of the average household in response to increasing media reporting about inflation.

M3 - Journal article

SN - 1815-4654

VL - 13

SP - 225

EP - 259

JO - International Journal of Central Banking

JF - International Journal of Central Banking

IS - 1

ER -