News on Inflation and the Epidemiology of Inflation Expectations

Emiliano Santoro, Damjan Pfajfar

Risultato della ricerca: Contributo in rivistaArticolo in rivistapeer review

Abstract

This paper examines the nexus between news coverage on inflation and households' inflation expectations. In doing so, we test the epidemiological foundations of the sticky information model (Carroll, 2003, 2006). We use both aggregate and household-level data from the Survey Research Center at the University of Michigan. We highlight a fundamental disconnection between news on inflation, consumers' frequency of expectation updating and the accuracy of their expectations. Our evidence provides at best weak support to the epidemiological framework, as most of the consumers who update their expectations do not revise them towards professional forecasters' mean forecast.
Lingua originaleEnglish
pagine (da-a)1-30
Numero di pagine30
RivistaJOURNAL OF MONEY, CREDIT, AND BANKING
Stato di pubblicazionePubblicato - 2012

Keywords

  • Inflation
  • Information Stickiness
  • News
  • Survey Expectations

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