Exposure to Daily Price Changes and Inflation Expectations

D’Acunto, Francesco; Malmendier, Ulrike; Ospina-Tejeiro, Juan José; Weber, Michael

doi:10.2139/ssrn.3468030

Cited by 17 publications

(22 citation statements)

References 38 publications

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“…As they undertake the majority of grocery shopping duties for their households, women are exposed to the volatile and large price changes of grocery goods more frequently than men. This differential exposure could explain the higher inflation expectations among women because individuals focus disproportionately more on price increases rather than decreases (Cavallo et al, 2017;Ranyard et al, 2008;Bates and Gabor, 1986), and tend to map their perception of current price changes into inflation expectations (D'Acunto et al, 2019).…”

Section: Resultsmentioning

confidence: 99%

Gender Roles and the Gender Expectations Gap

D’Acunto¹,

Malmendier²,

Weber³

2020

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Expectations about macro-finance variables, such as inflation, vary significantly across genders, even within the same household. We conjecture that traditional gender roles expose women and men to different economic signals in their daily lives, which in turn produce systematic variation in expectations. Using unique data on the contributions of men and women to household grocery chores, their resulting exposure to price signals, and their inflation expectations, we show that the gender expectations gap is tightly linked to participation in grocery shopping. We also document a gender gap in other economic expectations and discuss how it might affect economic choices.

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Section: Resultsmentioning

confidence: 99%

Gender Roles and the Gender Expectations Gap

D’Acunto¹,

Malmendier²,

Weber³

2020

Self Cite

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“…We also leave out of the analysis a variety of other plausible theories, which help explain different types of data. These include wishful thinking (e.g., Brunnermeier and Parker, 2005;Caplin and Leahy, 2019); over-weighting of personal experience (e.g., Malmendier and Nagel, 2016;D'Acunto, Malmendier, Ospina, and Weber, 2019;Das, Kuhnen, and Nagel, 2020); heterogeneous priors (e.g., Caballero and Simsek, 2017;Geanakoplos, 2010); adaptive learning (e.g., Eusepi and Preston, 2011;Evans and Honkapohja, 2001;Sargent, 2001); uncertainty shocks (e.g., Bloom, 2009a;Baker, Bloom, and Davis, 2016); robustness and ambiguity (e.g., Hansen and Sargent, 2012;Ilut and Schneider, 2014;Bhandari, Borovička, and Ho, 2019); non-Bayesian belief contagion (e.g., Carroll, 2001;Burnside, Eichenbaum, and Rebelo, 2016); and other plausible departures from the fully rational model (e.g., Gabaix, 2019;Molavi, 2019;Woodford, 2018).…”

Section: Introductionmentioning

confidence: 99%

Imperfect Macroeconomic Expectations: Evidence and Theory

Angeletos¹,

Huo²,

Sastry³

2020

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We document a new fact about survey expectations: in response to the main shocks driving the business cycle, expectations of unemployment and inflation under-react initially but overshoot later on. We show how previous, seemingly conflicting, evidence can be understood as different facets of this fact. We finally explain what the cumulated evidence means for macroeconomic theory. There is little support for theories emphasizing under-extrapolation or two close cousins of it, cognitive discounting and level-K thinking. Instead, the evidence favors the combination of dispersed, noisy information and over-extrapolation. * This paper was prepared for the 2020 NBER Macroeconomics Annual. We owe special thanks to our discussants, Ricardo Reis and Jessica Watcher, and the organizers, Martin Eichenbaum and Erik Hurst. We also thank Fabrice Collard for help with some of the material in Section 5. We finally thank Jeffrey Campbell, Olivier Coibion, Nicola Gennaioli, Cosmin Ilut, Yueran Ma, and Alp Simsek for useful comments. Angeletos acknowledges the financial support of the National Science Foundation (Award #1757198).

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“…For example, Coibion and Gorodnichenko (2015) emphasize the role played by gasoline prices in shaping households' inflation expectations. Cavallo et al (2017) andD'Acunto et al (2019) study how the prices faced by 4 households on a frequent basis in their shopping affect their inflation expectations. They find that frequently purchased (salient) goods' price changes map clearly into households' beliefs about broader price movements.…”

Section: Introductionmentioning

confidence: 99%

No Firm is an Island? How Industry Conditions Shape Firms' Aggregate Expectations

Andrade¹,

Coibion²,

Gautier³

et al. 2020

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We study how firms' expectations and actions are affected by both aggregate and industry-specific conditions using a survey of French manufacturing firms. We document an important new stylized fact. In response to industry-level shocks that have no aggregate effects, firms' aggregate expectations respond persistently. This is consistent with "island" models in which firms use the local prices they observe to make inferences about broader aggregate conditions. We then assess the extent to which these patterns are related to observable characteristics of firms and the industries in which they reside. Finally, we extend the analysis to firms' expectations over their own future price changes and document how these respond to both industry and aggregate variation.

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Exposure to Daily Price Changes and Inflation Expectations

Cited by 17 publications

References 38 publications

Gender Roles and the Gender Expectations Gap

Gender Roles and the Gender Expectations Gap

Imperfect Macroeconomic Expectations: Evidence and Theory

No Firm is an Island? How Industry Conditions Shape Firms' Aggregate Expectations

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