Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/207324 
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers No. 12498
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We implement a survey of Dutch households in which random subsets of respondents receive information about inflation. The resulting exogenously generated variation in inflation expectations is used to assess how expectations affect subsequent monthly consumption decisions relative to those in a control group. The causal effects of elevated inflation expectations on non-durable spending are imprecisely estimated but there is a sharp negative effect on durable spending. We provide evidence that this is likely driven by the fact that Dutch households seem to become more pessimistic about their real income as well as aggregate spending when they increase their inflation expectations. There is little evidence to support the idea that the degree to which respondents change their beliefs or their spending in response to information treatments depends on their level of cognitive or financial constraints.
Subjects: 
survey data
inflation expectations
households
durable and non-durable consumption
randomized control trial
JEL: 
E31
C83
D84
Document Type: 
Working Paper

Files in This Item:
File
Size
640.44 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.