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Subjective Models of Workers and Managers for Macroeconomic Expectations

Author

Listed:
  • Claudia Bruschi
  • Francesco D'Acunto
  • Saten Kumar
  • Michael Weber

Abstract

We propose a measure of subjective models of the macroeconomy for firms and workers. Subjective models are highly heterogeneous across agents, and their distribution is similar within the groups of firm managers and workers. At the same time, the beliefs of managers and workers who hold the same subjective models are different in reaction to monetary shocks. The expected persistence of monetary policy tightening differs across managers based on their subjective models but not across workers. And the expected effect of monetary tightening on short-term inflation differs across workers based on their subjective models but not across managers.

Suggested Citation

  • Claudia Bruschi & Francesco D'Acunto & Saten Kumar & Michael Weber, 2025. "Subjective Models of Workers and Managers for Macroeconomic Expectations," AEA Papers and Proceedings, American Economic Association, vol. 115, pages 248-253, May.
    • Handle: RePEc:aea:apandp:v:115:y:2025:p:248-53
    DOI: 10.1257/pandp.20251016
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    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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