publication . Preprint . Article . Other literature type . 2003

Macroeconomic Expectations of Households and Professional Forecasters

Carroll, C. D.;
Open Access
  • Published: 01 Feb 2003
Abstract
Economists have long emphasized the importance of expectations in determining macroeconomic outcomes. Yet there has been almost no recent effort to model actual empirical expectations data; instead, macroeconomists usually simply assume that expectations are "rational." This paper shows that while empirical household expectations are not rational in the usual sense, expectational dynamics are well captured by a model in which households' views derive from news reports of the views of professional forecasters, which in turn may be rational. The model's estimates imply that people only occasionally pay attention to news reports; this inattention generates "stickyn...
Subjects
free text keywords: Economics and Econometrics, Unemployment, media_common.quotation_subject, media_common, Sticky information, Rational expectations, Monetary policy, Macroeconomics, Economics, Inflation, Survey of Professional Forecasters
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publication . Preprint . Article . Other literature type . 2003

Macroeconomic Expectations of Households and Professional Forecasters

Carroll, C. D.;