TY  - RPRT
        AU  - Coibion, Olivier
AU  - Georgarakos, Dimitris
AU  - Gorodnichenko, Yuriy
AU  - Rooij, Maarten van
        TI  - How Does Consumption Respond to News about Inflation? Field Evidence from a Randomized Control Trial
        PY  - 2019/Jul/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 12498
        UR  - https://www.iza.org/publications/dp12498
        AB  - We implement a survey of Dutch households in which random subsets of respondents receive information about inflation. The resulting exogenously generated variation in inflation expectations is used to assess how expectations affect subsequent monthly consumption decisions relative to those in a control group. The causal effects of elevated inflation expectations on non-durable spending are imprecisely estimated but there is a sharp negative effect on durable spending. We provide evidence that this is likely driven by the fact that Dutch households seem to become more pessimistic about their real income as well as aggregate spending when they increase their inflation expectations. There is little evidence to support the idea that the degree to which respondents change their beliefs or their spending in response to information treatments depends on their level of cognitive or financial constraints.
        KW  - survey data
KW  - inflation expectations
KW  - households
KW  - durable and non-durable consumption
KW  - randomized control trial
        ER  -