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What People Believe about Monetary Finance and What We Can(‘t) Do about It: Evidence from a Large-Scale, Multi-Country Survey Experiment

Author

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  • Cars Hommes
  • Julien Pinter
  • Isabelle Salle

Abstract

We conduct an information-provision experiment within a large-scale household survey on public finance in France, The Netherlands and Italy. We elicit prior opinions via open-ended questions and introduce a measure of macroeconomic policy literacy. A central bank (CB) educational blogpost explaining the mechanics of CB money preceded by a short video clip on public finance can persistently induce less support for monetary-financed proposals and more for fiscal discipline and CB independence, no matter the respondents’ level of policy literacy. However, prior beliefs matter and contradictory information may be polarizing. Additional analysis of our data shows that information affects the respondents’ views by shifting their inflation and tax expectations associated to these policies.

Suggested Citation

  • Cars Hommes & Julien Pinter & Isabelle Salle, 2023. "What People Believe about Monetary Finance and What We Can(‘t) Do about It: Evidence from a Large-Scale, Multi-Country Survey Experiment," CESifo Working Paper Series 10574, CESifo.
    • Handle: RePEc:ces:ceswps:_10574
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    Cited by:

    1. Dräger, Lena & Nghiem, Giang, 2023. "Inflation Literacy, Inflation Expectations, and Trust in the Central Bank: A Survey Experiment," Hannover Economic Papers (HEP) dp-709, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.

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    More about this item

    Keywords

    large-scale household survey; information-provision experiment; RCT; central bank communication; expectations;
    All these keywords.

    JEL classification:

    • E70 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - General
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods

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