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Can We Anchor Macroeconomic Expectations Across Party Lines? Evidence from a Randomized Control Trial

Author

Listed:
  • Siye Bae

    (Northwestern University)

  • Sangyup Choi

    (Yonsei University)

  • Sang-Hyun Kim

    (Yonsei University)

  • Myunghwan Andrew Lee

    (New York University)

  • Myungkyu Shim

    (Yonsei University)

Abstract

We study how politically diverse households form and update macroeconomic expectations in response to public communication, using novel survey waves of Korean individuals conducted in 2022 during a historic inflation surge. The survey includes a randomized information treatment in which respondents are exposed to government forecasts about inflation stabilization, with treatments varying in messenger, framing, media source, and numerical content. We first document substantial political polarization in macroeconomic beliefs, including inflation expectations. We then find that only pro-government individuals revise their expectations downward in response to the information, while anti-government and centrist individuals remain largely unresponsive, regardless of message source, content, or presentation. These asymmetric responses are driven by differences in trust toward the policy authority, which are themselves linked to partisanship, highlighting the challenges of anchoring expectations in politically polarized environments.

Suggested Citation

  • Siye Bae & Sangyup Choi & Sang-Hyun Kim & Myunghwan Andrew Lee & Myungkyu Shim, 2025. "Can We Anchor Macroeconomic Expectations Across Party Lines? Evidence from a Randomized Control Trial," Working papers 2025rwp-255, Yonsei University, Yonsei Economics Research Institute.
    • Handle: RePEc:yon:wpaper:2025rwp-255
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    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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