Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/242376 
Year of Publication: 
2021
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2021: Climate Economics
Publisher: 
ZBW - Leibniz Information Centre for Economics, Kiel, Hamburg
Abstract: 
We use surveys of German households and firms to study the extent of information frictions among different groups of economic agents. Firms' expectations about the central bank policy rate, inflation, and aggregate unemployment are more aligned with expert forecasts and less dispersed than households'. Moreover, firms update their policy rate expectations significantly less when provided with an expert forecast and do not extrapolate to expected own borrowing rates, while households extrapolate to personal rates. Our results challenge previous findings that information frictions among firms are as large as those among households, which has important implications for modeling heterogeneity in macroeconomic expectation formation.
Subjects: 
Information frictions
firms
households
expectation formation
interest rates
JEL: 
D83
D84
E71
Document Type: 
Conference Paper

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