Subjective Models of the Macroeconomy: Evidence from Experts and a Representative Sample

Peter Andre, Carlo Pizzinelli, Christopher Roth and Johannes Wohlfart
Additional contact information
Carlo Pizzinelli: IMF
Johannes Wohlfart: University of Copenhagen, CEBI, CESifo

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: Using a sample of 2,200 households representative of the US population and a sample of more than 1,000 experts, we measure beliefs about how aggregate unemployment and inflation respond to different macroeconomic shocks. Expert predictions are quantitatively close to standard DSGE models and VAR evidence. While households' beliefs are directionally aligned with those of experts in the case of oil supply shocks and government spending shocks, they predict an opposite reaction of inflation to monetary policy and income tax shocks. A substantial fraction of deviations of household predictions can be explained by the use of a simple affective heuristic

Keywords: Expectation Formation; Subjective Models; Heuristics; Macroeconomic Shocks; Monetary Policy; Fiscal Policy JEL Classification: D83; D84; E31; E52; E71 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (24)

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https://warwick.ac.uk/fac/soc/economics/research/w ... werp_1342_-_roth.pdf

Related works:
Journal Article: Subjective Models of the Macroeconomy: Evidence From Experts and Representative Samples (2022)
Working Paper: Subjective Models of the Macroeconomy: Evidence From Experts and Representative Samples (2021)
Working Paper: Subjective Models of the Macroeconomy: Evidence from Experts and Representative Samples (2019)
Working Paper: SUBJECTIVE MODELS OF THE MACROECONOMY: EVIDENCE FROM EXPERTS AND A REPRESENTATIVE SAMPLE (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1342

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