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Dutch households' perceptions of economic growth and inflation


  • Céline Christensen
  • Peter van Els
  • Maarten van Rooij


This paper analysis the results of a survey on qualitative and quantitative perceptions and expectations of past, current and future macroeconomic developments among a representative household panel (DNB Household Survey). Perceptions of economic growth and inflation show a large dispersion. For the median respondents, however, the quantitative perceptions were found to be quite accurate. There is some evidence that the concept of economic growth is a more abstract notion for the general public than inflation. The results on qualitative and quantitative perceptions of current inflation could be interpreted as the Dutch public having a high level of inflation aversion. Those who have declared themselves more knowledgeable are also more actively involved in dealing with financial issues. The empirical evidence seems to corroborate that individuals with higher self-assessed knowledge levels are better informed indeed and have more accurate quantitative perceptions of economic growth and inflation. The survey also provides further insights on the connection between perceptions of current and past economic developments on the one hand, and expectations of future developments on the other. At the individual level there is a strong and robust correlation between expected growth and inflation for the next year and the perceptions of the current situation (rule of thumb behavior). But short-term expectations are also influenced by the views individuals hold on longer-term developments. Moreover, the results confirm the observed persistence in annual acroeconomic growth and inflation figures.

Suggested Citation

  • Céline Christensen & Peter van Els & Maarten van Rooij, 2006. "Dutch households' perceptions of economic growth and inflation," DNB Working Papers 093, Netherlands Central Bank, Research Department.
  • Handle: RePEc:dnb:dnbwpp:093

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    References listed on IDEAS

    1. Robert J. Shiller, 1997. "Why Do People Dislike Inflation?," NBER Chapters,in: Reducing Inflation: Motivation and Strategy, pages 13-70 National Bureau of Economic Research, Inc.
    2. Annamarie Lusardi & Olivia S. Mitchell, 2005. "Financial Literacy and Planning: Implications for Retirement Wellbeing," Working Papers wp108, University of Michigan, Michigan Retirement Research Center.
    3. McFadden, Daniel, 1999. "Rationality for Economists?," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 73-105, December.
    4. Daniel McFadden, 2001. "Economic Choices," American Economic Review, American Economic Association, vol. 91(3), pages 351-378, June.
    5. Marianne A. Hilgert & Jeanne M. Hogarth & Sondra G. Beverly, 2003. "Household financial management: the connection between knowledge and behavior," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Jul, pages 309-322.
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    Cited by:

    1. Dimitris Georgarakos & Roman Inderst, 2011. "Financial Advice and Stock Market Participation," BCL working papers 51, Central Bank of Luxembourg.
    2. David-Jan Jansen & Matthias Neuenkirch, 2017. "News Consumption, Political Preferences, and Accurate Views on Inflation," Research Papers in Economics 2017-03, University of Trier, Department of Economics.
    3. Maritta Paloviita and Matti Viren, 2012. "Are individual survey expectations internally consistent?," Discussion Papers 77, Aboa Centre for Economics.
    4. Ehrmann, Michael & Tzamourani, Panagiota, 2012. "Memories of high inflation," European Journal of Political Economy, Elsevier, vol. 28(2), pages 174-191.
    5. Ehrmann, M. & Pfajfar, D. & Santoro, E., 2014. "Consumer Attitudes and the Epidemiology of Inflation Expectations," Discussion Paper 2014-029, Tilburg University, Center for Economic Research.
    6. van der Cruijsen, C.A.B. & Eijffinger, S.C.W., 2007. "Actual versus Perceived Central Bank Transparency : The Case of the European Central Bank," Discussion Paper 2007-78, Tilburg University, Center for Economic Research.
    7. van der Cruijsen, Carin A.B. & Eijffinger, Sylvester C.W., 2010. "From actual to perceived transparency: The case of the European Central Bank," Journal of Economic Psychology, Elsevier, vol. 31(3), pages 388-399, June.
    8. Bruine de Bruin, Wändi & van der Klaauw, Wilbert & van Rooij, Maarten & Teppa, Federica & de Vos, Klaas, 2017. "Measuring expectations of inflation: Effects of survey mode, wording, and opportunities to revise," Journal of Economic Psychology, Elsevier, vol. 59(C), pages 45-58.
    9. Dimitris Christelis & Dimitris Georgarakos & Tullio Jappelli & Maarten van Rooij, 2016. "Trust in the Central Bank and Inflation Expectations," CSEF Working Papers 458, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    10. Duffy, David & Lunn, Peter D., 2009. "The Misperception of Inflation by Irish Consumers," The Economic and Social Review, Economic and Social Studies, vol. 40(2), pages 139-163.
    11. Carin van der Cruijsen & Sylvester Eijffinger, 2008. "Actual versus Perceived Transparency: The Case of the European Central Bank," DNB Working Papers 163, Netherlands Central Bank, Research Department.
    12. van der Cruijsen, C.A.B., 2008. "The economic impact of central bank transparency," Other publications TiSEM 86c1ba91-1952-45b4-adac-8, Tilburg University, School of Economics and Management.
    13. Robert Mosch & Henriëtte Prast, 2008. "Confidence and trust: empirical investigations for the Netherlands and the financial sector," DNB Occasional Studies 602, Netherlands Central Bank, Research Department.

    More about this item


    individual consumer perceptions and expectations; empirical knowledge of inflation and economic growth; rule of thumb behavior; DNB Household survey;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)

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