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Working Paper
Consumer Wealth and Price Expectations
Prices have reached record-high levels, and inflation is one of the primary concerns for consumers worldwide. Interestingly, changes in prices are in part a self-fulfilling prophecy: if consumers expect prices to rise, prices will rise. Moreover, consumers’ future price expectations influence policymaking, firms’ decisions, and consumer choice. Across 11 studies (N = 289,437), including a nine-wave longitudinal survey, a multinational study in twelve countries, a multidecade study with 250,000+ consumers, and multiple experiments, we show that consumers who feel more financially ...