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Tell Me Something I Don’t Already Know: Learning in Low and High-Inflation Settings

Author

Listed:
  • Michael Weber
  • Bernardo Candia
  • Hassan Afrouzi
  • Tiziano Ropele
  • Rodrigo Lluberas
  • Serafin Frache
  • Brent H. Meyer
  • Saten Kumar
  • Yuriy Gorodnichenko
  • Dimitris Georgarakos
  • Olivier Coibion
  • Geoff Kenny
  • Jorge Ponce

Abstract

Using randomized control trials (RCTs) applied over time in different countries, we study whether the economic environment affects how agents learn from new information. We show that as inflation rose in advanced economies, both households and firms became more attentive and informed about publicly available news about inflation, leading them to respond less to exogenously provided information about inflation and monetary policy. We also study the effects of RCTs in countries where inflation has been consistently high (Uruguay) and low (New Zealand) as well as what happens when the same agents are repeatedly provided information in both low- and high-inflation environments (Italy). Our results broadly support models in which inattention is an endogenous outcome that depends on the economic environment.

Suggested Citation

  • Michael Weber & Bernardo Candia & Hassan Afrouzi & Tiziano Ropele & Rodrigo Lluberas & Serafin Frache & Brent H. Meyer & Saten Kumar & Yuriy Gorodnichenko & Dimitris Georgarakos & Olivier Coibion & Ge, 2023. "Tell Me Something I Don’t Already Know: Learning in Low and High-Inflation Settings," NBER Working Papers 31485, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31485
    Note: EFG IFM ME
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    Cited by:

    1. Fiorella De Fiore & Damiano Sandri & James Yetman, 2025. "Household perceptions and expectations in the wake of the inflation surge: survey evidence," BIS Bulletins 104, Bank for International Settlements.
    2. Benchimol, Jonathan & Bounader, Lahcen & Dotta, Mario, 2025. "Estimating Behavioral Inattention," Journal of Economic Behavior & Organization, Elsevier, vol. 236(C).
    3. Medina, J.P. & Mello, Miguel & Ponce, Jorge, 2024. "Heterogeneous inflation expectations: A call for customized monetary policy communication?," Journal of International Money and Finance, Elsevier, vol. 149(C).
    4. Oliver Pfauti, 2023. "The Inflation Attention Threshold and Inflation Surges," Papers 2308.09480, arXiv.org, revised Aug 2024.
    5. Meyer, Brent H. & Sheng, Xuguang Simon, 2025. "Unit cost expectations: Firms’ perspectives on inflation," European Economic Review, Elsevier, vol. 174(C).
    6. Çekin, Semih Emre & Polattimur, Hamza, 2025. "Televised inflation: Measuring TV news coverage and its effect on household expectations," ZEW Discussion Papers 25-051, ZEW - Leibniz Centre for European Economic Research.
    7. Go Fujii & Shogo Nakano & Kosuke Takatomi, 2025. "Households' Medium- to Long-Term Inflation Expectations Formation: The Role of Past Experience and Inflation Regimes," Bank of Japan Working Paper Series 25-E-6, Bank of Japan.
    8. Rychalovska, Yuliya & Slobodyan, Sergey & Wouters, Raf, 2025. "Survey expectations, learning and inflation dynamics," European Economic Review, Elsevier, vol. 180(C).
    9. Schnorpfeil, Philip & Weber, Michael & Hackethal, Andreas, 2023. "Households' response to the wealth effects of inflation," CEPR Discussion Papers 18440, C.E.P.R. Discussion Papers.
    10. Bernardino, Tiago & Gabriel, Ricardo Duque & Quelhas, João & Silva-Pereira, Márcia, 2025. "The full, persistent, and symmetric pass-through of a temporary VAT cut," Journal of Public Economics, Elsevier, vol. 248(C).
    11. Fabio Braggion & Felix von Meyerinck & Nic Schaub & Michael Weber, 2024. "The Long-term Effects of Inflation on Inflation Expectations," NBER Working Papers 32160, National Bureau of Economic Research, Inc.
    12. Pavlova, Lora, 2025. "Framing effects in consumer expectations surveys," Journal of Economic Behavior & Organization, Elsevier, vol. 231(C).
    13. Dräger, Lena & Gründler, Klaus & Potrafke, Niklas, 2025. "Peer Effects in Macroeconomic Expectations," Hannover Economic Papers (HEP) dp-739, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    14. Brüll, Eduard & Mäurer, Samuel & Rostam-Afschar, Davud, 2025. "Beliefs about bots: How employers plan for AI in white-collar work," ZEW Discussion Papers 25-057, ZEW - Leibniz Centre for European Economic Research.
    15. Nathan Goldstein & Ohad Raveh, 2024. "Looking up the sky: unidentified aerial phenomena and macroeconomic attention," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-25, December.
    16. Schnorpfeil, Philip & Weber, Michael & Hackethal, Andreas, 2025. "Inflation and Trading," Journal of Financial Economics, Elsevier, vol. 173(C).
    17. Hoffmann, Mathias & Mönch, Emanuel & Pavlova, Lora & Schultefrankenfeld, Guido, 2025. "A KISS for central bank communication in times of high inflation," Discussion Papers 12/2025, Deutsche Bundesbank.
    18. Kieren, Pascal & König-Kersting, Christian & Schmidt, Robert & Trautmann, Stefan & Heinicke, Franziska, 2025. "First-order and higher-order inflation expectations: Evidence about Households and Firms," Journal of Economic Behavior & Organization, Elsevier, vol. 233(C).
    19. Benjamin Born & Nora Lamersdorf & Jana-Lynn Schuster & Sascha Steffen, 2025. "From Tweets to Transactions: High-Frequency Inflation Expectations, Consumption, and Stock Returns," CESifo Working Paper Series 12361, CESifo.
    20. Buelens, Christian, 2025. "Googling ‘inflation’: Household inflation attention across the euro area," European Journal of Political Economy, Elsevier, vol. 89(C).
    21. Coleman, Winnie & Nautz, Dieter, 2025. "Asymmetric inflation target credibility," Journal of International Money and Finance, Elsevier, vol. 157(C).
    22. Erwan Gautier & Jérémi Montornès, 2025. "Measuring Households' Inflation Expectations in the Euro Area: The Effect of Panel Conditioning," Working papers 1007, Banque de France.
    23. Jaanika Merikyll & Matthias Rottner, 2025. "Monetary policy and earnings inequality.Inflation dependencies," Bank of Estonia Working Papers wp2025-05, Bank of Estonia, revised 13 Jun 2025.
    24. González, Felipe & Prem, Mounu, 2025. "Government Support in Times of Crisis: Transfers and the Road to Socialism," IZA Discussion Papers 17661, Institute of Labor Economics (IZA).
    25. Daria Minina & Gabriele Galati & Richhild Moessner & Maarten van Rooij, 2024. "The effect of information on consumer inflation expectations," Working Papers 810, DNB.

    More about this item

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

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