Lamla, Michael J and Lein, Sarah M (2014) The role of media for consumers’ inflation expectation formation. Journal of Economic Behavior & Organization, 106 (C). pp. 62-77. DOI https://doi.org/10.1016/j.jebo.2014.05.004
Lamla, Michael J and Lein, Sarah M (2014) The role of media for consumers’ inflation expectation formation. Journal of Economic Behavior & Organization, 106 (C). pp. 62-77. DOI https://doi.org/10.1016/j.jebo.2014.05.004
Lamla, Michael J and Lein, Sarah M (2014) The role of media for consumers’ inflation expectation formation. Journal of Economic Behavior & Organization, 106 (C). pp. 62-77. DOI https://doi.org/10.1016/j.jebo.2014.05.004
Abstract
The full-information rational expectations model is clearly rejected by the data. The expectation formation process has therefore important implications for macroeconomic outcomes. We examine how consumers react to information provided by the media, by taking into account that this information is imperfect. We show that information rigidities play a role empirically. Intensive news reporting improves the accuracy of consumers' inflation expectations, because they receive more information. However, this effect depends on the tone of the news. If news are badly toned, the effect reverts. © 2014.
Item Type: | Article |
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Uncontrolled Keywords: | Imperfect information; Inflation expectation formation; Media |
Subjects: | H Social Sciences > HG Finance |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Essex Business School |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 11 Nov 2014 17:04 |
Last Modified: | 16 May 2024 16:37 |
URI: | http://repository.essex.ac.uk/id/eprint/11205 |