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Media type:
E-Article
Title:
Disagreement in Consumer Inflation Expectations
Contributor:
ŁYZIAK, TOMASZ;
SHENG, XUGUANG SIMON
imprint:
Wiley, 2023
Published in:Journal of Money, Credit and Banking
Language:
English
DOI:
10.1111/jmcb.12981
ISSN:
0022-2879;
1538-4616
Origination:
Footnote:
Description:
<jats:title>Abstract</jats:title><jats:p>By carefully matching the data sets from the Michigan Survey of Consumers with the Survey of Professional Forecasters, we show that there exists substantial heterogeneity in the propensity of U.S. households to learn from experts in forming inflation expectations. Additional results for a group of European economies broadly confirm this observation. We advance an extended version of the sticky‐information model to analyze disagreement in consumer inflation expectations. Besides differences in consumers' propensities to learn, disagreement in our model arises from heterogeneity in consumers' fundamental inflation and past expectations and experts' different views about future inflation.</jats:p>