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Title: Perceived and Expected Rates of Inflation of US Firms
The seminal work of Jonung (1981) showed that households' perceptions of inflation are the strongest predictor of households' inflation expectations. This fact has been a key ingredient for testing and developing theoretical models of how economic agents form expectations (e.g., the famous Lucas (1972) island model). However, little is known about whether perceptions play a similar role for firms. Using a new survey of American CEOs, we document that inflation perceptions shape the inflation expectations of firms just as Jonung (1981) found for households. These results suggest that information rigidities apply not only for households but also for CEOs.  more » « less
Award ID(s):
1919307
PAR ID:
10437859
Author(s) / Creator(s):
; ; ;
Date Published:
Journal Name:
AEA Papers and Proceedings
Volume:
113
ISSN:
2574-0768
Page Range / eLocation ID:
52 to 55
Format(s):
Medium: X
Sponsoring Org:
National Science Foundation
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