Inflation Expectations, Learning and Supermarket Prices

Information frictions play a central role in the formation of household inflation expectations, but there is no consensus about their origins. We address this question with novel evidence from survey experiments. We document two main findings. First, individuals in lower-inflation contexts have sign...

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Detalles Bibliográficos
Autores principales: Cavallo, Alberto, Cruces, Guillermo Antonio, Pérez Truglia, Ricardo
Formato: Articulo Documento de trabajo
Lenguaje:Inglés
Publicado: 2016
Materias:
Ciencias Económicas
Inflations
Prices
Acceso en línea:http://sedici.unlp.edu.ar/handle/10915/128111
Aporte de:
SEDICI (UNLP) de Universidad Nacional de La Plata
id I19-R120-10915-128111
record_format dspace
institution Universidad Nacional de La Plata
institution_str I-19
repository_str R-120
collection SEDICI (UNLP)
language Inglés
topic Ciencias Económicas
Inflations
Prices
spellingShingle Ciencias Económicas
Inflations
Prices
Cavallo, Alberto
Cruces, Guillermo Antonio
Pérez Truglia, Ricardo
Inflation Expectations, Learning and Supermarket Prices
topic_facet Ciencias Económicas
Inflations
Prices
description Information frictions play a central role in the formation of household inflation expectations, but there is no consensus about their origins. We address this question with novel evidence from survey experiments. We document two main findings. First, individuals in lower-inflation contexts have significantly weaker priors about the inflation rate. This finding suggests that rational inattention may be an important source of information frictions. Second, cognitive limitations also appear to be a source of information frictions: even when information about inflation statistics is made readily available, individuals still place a significant weight on less accurate sources of information, such as their memories of the price changes of the supermarket products they purchase. We discuss the implications of these findings for macroeconomic models and policy-making.
format Articulo
Documento de trabajo
author Cavallo, Alberto
Cruces, Guillermo Antonio
Pérez Truglia, Ricardo
author_facet Cavallo, Alberto
Cruces, Guillermo Antonio
Pérez Truglia, Ricardo
author_sort Cavallo, Alberto
title Inflation Expectations, Learning and Supermarket Prices
title_short Inflation Expectations, Learning and Supermarket Prices
title_full Inflation Expectations, Learning and Supermarket Prices
title_fullStr Inflation Expectations, Learning and Supermarket Prices
title_full_unstemmed Inflation Expectations, Learning and Supermarket Prices
title_sort inflation expectations, learning and supermarket prices
publishDate 2016
url http://sedici.unlp.edu.ar/handle/10915/128111
work_keys_str_mv AT cavalloalberto inflationexpectationslearningandsupermarketprices
AT crucesguillermoantonio inflationexpectationslearningandsupermarketprices
AT pereztrugliaricardo inflationexpectationslearningandsupermarketprices
bdutipo_str Repositorios
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