Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/232070 
Year of Publication: 
2021
Series/Report no.: 
Deutsche Bundesbank Discussion Paper No. 07/2021
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
Based on a new survey of German households, we investigate the role that information channels and lifetime experience play in households' inflation expectations. We show that the types of information channels that households use to inform themselves about monetary policy are closely related to their socioeconomic characteristics. These information channels, in turn, have a major influence on the level of perceived past and expected future inflation, as well as on the uncertainty thereof. The expected future change in inflation and the unemployment rate, however, is strongly influenced by individual experience of these variables. Similarly, the expected response of inflation to a change in the interest rate is also shaped by experience. We propose the interpretation that households obtain inflation numbers from the media, but their 'economic model' is shaped by experience.
Subjects: 
Household expectations
inflation expectations
information channels
experience
Bundesbank household survey
JEL: 
E31
D84
E71
ISBN: 
978-3-95729-815-7
Document Type: 
Working Paper

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