Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/232545
Authors: 
D'Acunto, Francesco
Hoang, Daniel
Weber, Michael
Year of Publication: 
2021
Series/Report no.: 
KIT Working Paper Series in Economics No. 148
Abstract: 
Binding lower bounds on interest rates and large government deficits limit the scope of fiscal and monetary policies to stimulate households' spending through financial intermediaries and firms. Policymakers have thus been implementing unconventional policies that aim to increase households' spending directly through managing their expectations. We first show theoretically and empirically that higher in ation expectations increase households' consumption. We then design a difference-in-differences strategy to assess the effectiveness of unconventional fiscal policy and forward guidance, both of which aim to raise aggregate demand via managing expectations. Whereas unconventional fiscal policy increases households' expectations and spending, forward guidance announcements do not.
Subjects: 
Expectations
Household Finance
Heterogeneous Beliefs
Fiscal Policy
Monetary Policy
Cognitive Abilities
Behavioral Macroeconomics
Macroeconomics with Micro Data
JEL: 
D12
D84
D91
E21
E31
E32
E52
E65
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size





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