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Lookup NU author(s): Dr Robert AndersonORCiD
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License (CC BY-NC 4.0).
This paper provides an empirical analysis of learning by individual consumers in thecontext of US inflation expectations. By exploiting the short panel dimension of theMichigan survey data, the paper demonstrates that agents overall improve the accuracy oftheir forecasts at the second interview compared to the first, and hence demonstrateadaptive learning. Further, the extent of this learning, as measured by the reduction in anindividual’s absolute forecast error for inflation, is associated with their socioeconomicand demographic characteristics. However, heterogeneity in forecast accuracy is lessmarked at reinterview than at the initial interview, implying that heterogeneity is reducedby learning.
Author(s): Anderson RDJ, Becker R, Osborn DR
Publication type: Conference Proceedings (inc. Abstract)
Publication status: Published
Conference Name: Conference on Consumer Inflation Expectations
Year of Conference: 2010
Online publication date: 19/11/2010
Acceptance date: 01/06/2010
Date deposited: 05/09/2017
Publisher: Federal Reserve Bank of New York
URL: https://www.newyorkfed.org/medialibrary/media/research/conference/2010/consumer/AndersonR2010R_HeterogeneityConsumersLearningAboutInflation.pdf
