Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/240328 
more recent Version: 
Authors: 
Year of Publication: 
2020
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 5/2020
Publisher: 
Bank of Finland, Helsinki
Abstract: 
I construct a novel measure of household uncertainty based on survey data for European countries. I show that household uncertainty shocks are not universally like negative demand shocks. Notably, household uncertainty shocks are largely inflationary in Europe. These results lend support to a pricing bias mechanism as an important transmission channel. A comparison of results across countries suggest that demographics and factors related to average markups along with monetary policy play a role in the transmission of household uncertainty to inflation. I develop an Overlapping Generations New Keynesian model with Deep Habits to rationalize these results.
Subjects: 
uncertainty
inflation
household expectations
deep habits
demographics
JEL: 
D84
E20
E30
E71
Persistent Identifier of the first edition: 
ISBN: 
978-952-323-324-9
Additional Information: 
A revised version published on 14 Feb 2022 is available as BoF DP 5/2022.
Document Type: 
Working Paper

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