Research

Working papers

Household Disagreement about Expected Inflation, with Paula Patzelt and Ricardo Reis

Current version: March 2024 (pdf link) . To be available in the Research Handbook of Inflation (Edward Elgar Publishing).

Abstract: We survey the main facts that have emerged from research on disagreement between households on what they expect inflation to be. We document them using figures and correlations that capture: the statistical regularities on the observable drivers of disagreement, the measurement of residual disagreement, the usefulness of disagree- ment to forecast inflation, the response of disagreement to shocks, the disagreement between households and professionals, and the relation between disagreement, risk, and uncertainty.


Empty vessels make the most noise: "don't know" answers in household expectations surveys. Unpublished manuscript. Current version: March 2024. 

Abstract: This paper explores the meaning of “don’t know” (DK/NA) responses in household expectations surveys, and how their treatment can affect inferences. Using primarily the Michigan Survey of Consumers (MSC), I find that: (i) DK/NAs capture not only high uncertainty, but also a lack of knowledge and understanding, as well as other behavioral traits; (ii) Answering “don’t know” is much more prevalent among women, low education, low income and older households, making them more impacted than others by the deletion of DK/NA responses, and entailing concerns about a distortion of sample weights when doing so; (iii) Sample selection concerns arise when the socio-economic characteristics correlated with a higher propensity to answer “don’t know” are also correlated with the values of expectations, which is the case for inflation expectations, as confirmed by both my imputation method on MSC data and a natural experiment offered by the Bank of England/Ipsos Inflation Attitudes Survey. This leads to a negative bias in reported average expected inflation expectations; (iv) Multiple imputation offers new insights about expectations formation by including DK/NAs in statistical analysis.

Work in progress

The “uncertainty trap”: does greater subjective uncertainty about economic outlooks, faced by already socio-economically vulnerable individuals, reinforce inequalities?