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dc.contributor.authorArmantier, Olivieren_US
dc.contributor.authorBruine de Bruin, Wändien_US
dc.contributor.authorTopa, Giorgioen_US
dc.contributor.authorvan der Klaauw, Wilberten_US
dc.contributor.authorZafar, Basiten_US
dc.description.abstractWe compare the inflation expectations reported by consumers in a survey with their behavior in a financially incentivized investment experiment designed such that future inflation affects payoffs. The inflation expectations survey is found to be informative in the sense that the beliefs reported by the respondents are correlated with their choices in the experiment. Furthermore, most respondents appear to act on their inflation expectations showing patterns consistent (both in direction and magnitude) with expected utility theory. Respondents whose behavior cannot be rationalized tend to be less educated and to score lower on a numeracy and financial literacy scale. These findings are therefore the first to provide support to the microfoundations of modern macroeconomic models.en_US
dc.publisherFederal Reserve Bank of New York New York, NYen_US
dc.relation.ispartofseriesStaff Report, Federal Reserve Bank of New York 509en_US
dc.subject.keywordinflation expectationsen_US
dc.subject.keywordexperimental economicsen_US
dc.titleInflation expectations and behavior: Do survey respondents act on their beliefs?en_US
dc.typeWorking Paperen_US
Appears in Collections:Staff Reports, Federal Reserve Bank of New York

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