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Author:Armantier, Olivier 

Report
The price is right: updating of inflation expectations in a randomized price information experiment

Understanding the formation of consumer inflation expectations is considered crucial for managing monetary policy. This paper investigates how consumers form and update their inflation expectations using a unique ?information? experiment embedded in a survey. We first elicit respondents? expectations for future inflation either in their own consumption basket or for the economy overall. We then randomly provide a subset of respondents with inflation-relevant information: either past-year food price inflation, or a median professional forecast of next-year overall inflation. Finally, inflation ...
Staff Reports , Paper 543

Report
An overview of the Survey of Consumer Expectations

This report presents an overview of the Survey of Consumer Expectations, a new monthly online survey of a rotating panel of household heads. The survey collects timely information on consumers? expectations and decisions on a broad variety of topics, including but not limited to inflation, household finance, the labor market, and the housing market. There are three main goals of the survey: (1) measuring consumer expectations at a high frequency, (2) understanding how these expectations are formed, and (3) investigating the link between expectations and behavior. This report discusses the ...
Staff Reports , Paper 800

Discussion Paper
Inflation Expectations and Behavior: Do Survey Respondents Act on Their Beliefs?

Surveys of consumers’ inflation expectations are now a key component of monetary policy. To date, however, little work has been done on 1) whether individual consumers act on their beliefs about future inflation, and 2) whether the inflation expectations elicited by these surveys are actually informative about the respondents’ beliefs. In this post, we report on a new study by Armantier, Bruine de Bruin, Topa, van der Klaauw, and Zafar (2010) that investigates these two issues by comparing consumers’ survey-based inflation expectations with their behavior in a financially incentivized ...
Liberty Street Economics , Paper 20110727

Discussion Paper
An Update on How Households Are Using Stimulus Checks

In October, we reported evidence on how households used their first economic impact payments, which they started to receive in mid-April 2020 as part of the CARES Act, and how they expected to use a second stimulus payment. In this post, we exploit new survey data to examine how households used the second round of stimulus checks, issued starting at the end of December 2020 as part of the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act, and we investigate how they plan to use the third round authorized in March under the American Rescue Plan Act. We find remarkable ...
Liberty Street Economics , Paper 20210407

Report
Inflation expectations and behavior: Do survey respondents act on their beliefs?

We compare the inflation expectations reported by consumers in a survey with their behavior in a financially incentivized investment experiment designed such that future inflation affects payoffs. The inflation expectations survey is found to be informative in the sense that the beliefs reported by the respondents are correlated with their choices in the experiment. Furthermore, most respondents appear to act on their inflation expectations showing patterns consistent (both in direction and magnitude) with expected utility theory. Respondents whose behavior cannot be rationalized tend to be ...
Staff Reports , Paper 509

Discussion Paper
History of Discount Window Stigma

In August 2007, at the onset of the recent financial crisis, the Federal Reserve encouraged banks to borrow from the discount window (DW) but few did so. This lack of DW borrowing has been widely attributed to stigma--concerns that, if discount borrowing were detected, depositors, creditors, and analysts could interpret it as a sign of financial weakness. In this post, we review the history of the DW up until 2003, when the current DW regime was established, and argue that some past policies may have inadvertently contributed to a reluctance to borrow from the DW that persists to this day.
Liberty Street Economics , Paper 20150810

Discussion Paper
Nudging Inflation Expectations: An Experiment

Managing consumers? inflation expectations is of critical importance to central banks in the conduct of monetary policy. But managing inflation expectations requires more than just monitoring expectations; it also requires an understanding of how these expectations are formed. In this post, we present results from a new study that investigates how individual consumers use selected information on food prices in forming their inflation expectations. While the provision of this information leads individuals to meaningfully revise expectations of their own-basket inflation rate, we find there is ...
Liberty Street Economics , Paper 20121105

Discussion Paper
Mixed Impacts of the Federal Tax Reform on Consumer Expectations

The Tax Cuts and Jobs Act of 2017 changed the tax brackets, tax rates, credits and deductions for individuals and similarly altered corporate tax rates, deductions and exclusions. In this post, we examine whether the reform has shifted individuals’ expectations about their financial situation and the macroeconomic outlook. We also ask whether households have already started to adjust their behavior in line with their expectations. In order to answer these questions, we use novel data from a special module of the New York Fed’s Survey of Consumer Expectations (SCE) fielded in February 2018 ...
Liberty Street Economics , Paper 20180523

Journal Article
An overview of the Survey of Consumer Expectations

The authors present an overview of the New York Fed?s Survey of Consumer Expectations, a monthly online survey of a rotating panel of household heads. The survey collects timely information on respondents? expectations and decisions on a broad variety of topics, including inflation, household finance, the labor market, and the housing market. It has three main goals: (1) measuring consumer expectations at a high frequency, (2) understanding how these expectations are formed, and (3) investigating the link between expectations and behavior. The authors discuss the origins of the survey, the ...
Economic Policy Review , Issue 23-2 , Pages 51-72

Discussion Paper
Introducing the FRBNY Survey of Consumer Expectations: Survey Goals, Design and Content

Starting in the first quarter of 2014, the Federal Reserve Bank of New York (FRBNY) will begin reporting findings from a new national survey designed to elicit consumers? expectations for a wide range of household-level and aggregate economic and financial conditions. This week, we provide an introduction to the new survey in a series of four blog posts. In this first post, we discuss the overall objectives of the new survey, its sample design, and content. In the posts that follow, we will provide further details and present preliminary findings from the survey on three broad categories of ...
Liberty Street Economics , Paper 20131204b

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