Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/113170
Authors: 
Lamla, Michael
Dräger, Lena
Pfajfar, Damjan
Year of Publication: 
2015
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2015: Ökonomische Entwicklung - Theorie und Politik - Session: Expectations and uncertainty G03-V1
Abstract: 
Using the microdata of the Michigan Survey of Consumers, we evaluate whether U.S. consumers form macroeconomic expectations consistent with different economic concepts. We observe that 50\% of consumers have expectations consistent with the Income Fisher equation, 46\% with the Taylor rule and 34\% with the Phillips curve. For the Taylor rule and the Phillips curve we observe less consistency during recessions and with high inflation. Moreover, changes in the communication policy of the Fed affect consistency. The strongest positive effect comes from the introduction of the official inflation target. Finally, consumers with theory-consistent expectations have lower absolute inflation forecast errors.
JEL: 
E52
D84
C25
Document Type: 
Conference Paper

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