Influencing household inflation expectations

Alberto Cavallo, Guillermo Crucas, Ricardo Perez-Truglia 10 November 2014

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Expectations about macroeconomic variables play an important role in economic theory and policymaking. Household inflation expectations, in particular, are key to understand consumption and investment decisions, and ultimately, the impact of monetary policies. Although central banks have a natural desire to influence expectations, there is no consensus on how household expectations are formed or what the best way to affect them is (see Bernanke 2007, Bachmann et al. 2012, Coibion and Gorodnichenko 2013, and Armantier et al. 2014).

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Topics:  Monetary policy

Tags:  expectations, beliefs, inflation, inflation expectations, monetary policy, US, Argentina, central bank communication, rational inattention, costly information, learning

Culture: Persistence and evolution

Francesco Giavazzi, Ivan Petkov, Fabio Schiantarelli 16 June 2014

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Are a person’s values and beliefs persistent, or do they evolve – possibly rather quickly – in response to the economic and institutional environment? This is a central question, for instance, if one is interested in assessing the likelihood of success of reforms that change rules within a country. Are such reforms doomed because a country’s culture cannot be changed, or can they succeed because they can change cultural attitudes by altering incentives, and if so, over what time horizon?

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Topics:  Frontiers of economic research Institutions and economics Migration

Tags:  US, immigration, religion, values, Culture, attitudes, beliefs