Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/250688 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15027
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
As the pandemic spread across the U.S., disagreement among U.S. households about inflation expectations surged along with the mean perceived and expected level of inflation. Simultaneously, the inflation experienced by households became more dispersed. Using matched micro data on spending of households and their macroeconomic expectations, we study the link between the inflation experienced by households in their daily shopping and their perceived and expected levels of inflation both before and during the pandemic. In normal times, realized inflation barely differs across observable dimensions but low income, low education, and Black households experienced a larger increase in realized inflation than other households did. Dispersion in realized and perceived inflation explains a large share of the rise in dispersion in inflation expectations.
Subjects: 
inflation expectations
COVID-19
surveys
JEL: 
E02
E03
Document Type: 
Working Paper

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