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Information Treatments, Hypotheticals, and Event Studies: Comparative Estimates

Author

Listed:
  • Carola Binder
  • Dimitris Georgarakos
  • Pei Kuang
  • Li Tang

Abstract

We study how consumer expectations respond to monetary policy announcements using a two-wave survey experiment around the September 2025 FOMC meeting. We compare three commonly used approaches to identifying causal effects on expectations: hypothetical ("vignette’’) scenarios, randomized control trials, and event studies. All three identification strategies yield qualitatively similar results: a rate cut reduces short- and long-run inflation expectations, raises expectations of economic activity, and lowers unemployment expectations. The estimated magnitudes are similar across the randomized controlled trial and event-study approaches, but relatively larger for vignette-based measures. Within-respondent comparisons further show that individuals who revise their expectations more in response to vignette scenarios also exhibit larger revisions following actual policy announcements and experimental information treatments.

Suggested Citation

  • Carola Binder & Dimitris Georgarakos & Pei Kuang & Li Tang, 2026. "Information Treatments, Hypotheticals, and Event Studies: Comparative Estimates," NBER Working Papers 35090, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:35090
    Note: ME
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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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