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dc.contributor.authorMadeira, Carlosen_US
dc.contributor.authorZafar, Basiten_US
dc.date.accessioned2012-01-16en_US
dc.date.accessioned2012-08-17T14:35:01Z-
dc.date.available2012-08-17T14:35:01Z-
dc.date.issued2012en_US
dc.identifier.urihttp://hdl.handle.net/10419/60826-
dc.description.abstractUsing the panel component of the Michigan Survey of Consumers, we show that individuals, in particular women and ethnic minorities, are highly heterogeneous in their expectations of inflation. We estimate a model of inflation expectations based on learning from experience that also allows for heterogeneity in both private information and updating. Our model vastly outperforms existing models of inflation expectations in explaining the heterogeneity in the data. We find that women, ethnic minorities, and less educated agents have a higher degree of heterogeneity in their private information, and are also slower to update their expectations. In addition, we show that personal income forecasts are positively related to subjective inflation expectations. During the 2000s, consumers believe inflation to be more persistent in the short term, but temporary fluctuations in inflation have less effect on income and long-term inflation expectations. Finally, we find evidence that sticky expectations and the heterogeneity of new information received by consumers generate higher mark-ups and inflation.en_US
dc.language.isoengen_US
dc.publisherFederal Reserve Bank of New York New York, NYen_US
dc.relation.ispartofseriesStaff Report, Federal Reserve Bank of New York 536en_US
dc.subject.jelC53en_US
dc.subject.jelC81en_US
dc.subject.jelE31en_US
dc.subject.jelE37en_US
dc.subject.jelD83en_US
dc.subject.jelD84en_US
dc.subject.ddc330en_US
dc.subject.keywordinflation expectationsen_US
dc.subject.keywordimperfect informationen_US
dc.subject.keywordheterogeneous expectationsen_US
dc.subject.keywordlearningen_US
dc.subject.keywordsticky informationen_US
dc.subject.stwInflationserwartungen_US
dc.subject.stwUnvollkommene Informationen_US
dc.subject.stwLernprozessen_US
dc.subject.stwSoziale Schichten_US
dc.subject.stwSch├Ątzungen_US
dc.subject.stwUSAen_US
dc.titleHeterogeneous inflation expectations, learning, and market outcomesen_US
dc.typeWorking Paperen_US
dc.identifier.ppn683162276en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Staff Reports, Federal Reserve Bank of New York

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