Inflation expectations, learning, and supermarket prices: Evidence from survey experiments

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 low inflation contexts have signif...

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Autores principales: Cavallo, Alberto, Cruces, Guillermo, Perez Truglia, Ricardo
Formato: Articulo
Lenguaje:Inglés
Publicado: 2017
Materias:
Ciencias Económicas
Inflation
Prices
Acceso en línea:http://sedici.unlp.edu.ar/handle/10915/87188
Aporte de:
SEDICI (UNLP) de Universidad Nacional de La Plata
id I19-R120-10915-87188
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
Inflation
Prices
spellingShingle Ciencias Económicas
Inflation
Prices
Cavallo, Alberto
Cruces, Guillermo
Perez Truglia, Ricardo
Inflation expectations, learning, and supermarket prices: Evidence from survey experiments
topic_facet Ciencias Económicas
Inflation
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 low 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 available, individuals still place a significant weight on inaccurate 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 policymaking.
format Articulo
Articulo
author Cavallo, Alberto
Cruces, Guillermo
Perez Truglia, Ricardo
author_facet Cavallo, Alberto
Cruces, Guillermo
Perez Truglia, Ricardo
author_sort Cavallo, Alberto
title Inflation expectations, learning, and supermarket prices: Evidence from survey experiments
title_short Inflation expectations, learning, and supermarket prices: Evidence from survey experiments
title_full Inflation expectations, learning, and supermarket prices: Evidence from survey experiments
title_fullStr Inflation expectations, learning, and supermarket prices: Evidence from survey experiments
title_full_unstemmed Inflation expectations, learning, and supermarket prices: Evidence from survey experiments
title_sort inflation expectations, learning, and supermarket prices: evidence from survey experiments
publishDate 2017
url http://sedici.unlp.edu.ar/handle/10915/87188
work_keys_str_mv AT cavalloalberto inflationexpectationslearningandsupermarketpricesevidencefromsurveyexperiments
AT crucesguillermo inflationexpectationslearningandsupermarketpricesevidencefromsurveyexperiments
AT pereztrugliaricardo inflationexpectationslearningandsupermarketpricesevidencefromsurveyexperiments
bdutipo_str Repositorios
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