Search Results
Working Paper
Household Beliefs about Fiscal Dominance
We study beliefs about fiscal dominance using a survey of German households. We first design and conduct a randomized controlled trial to identify how fiscal news impacts individuals’ debt-to-GDP and inflation expectations. We document that the link between debt and inflation crucially depends on individuals’ views about the fiscal space. News leading individuals to expect a higher debt-to-GDP ratio makes them more likely to revise their inflation expectations upward. These average effects are driven by individuals who think that fiscal resources are stretched. By contrast, individuals ...
Working Paper
Household Inflation Expectations and Consumer Spending: Evidence from Panel Data
Recent research offers mixed results concerning the relationship between inflation expectations and consumption, using qualitative measures of readiness to spend. We revisit this question using survey panel data of actual spending from the U.S. between 2009 and 2012 that also allows us to control for household heterogeneity. We find that durables spending increases with expected inflation only for selected types of households while nondurables spending does not respond to expected inflation. Moreover, spending decreases with expected unemployment. These results imply a limited stimulating ...
Journal Article
Assessing the Recent Rise in Unemployment
The unemployment rate has risen over half a percentage point since the second quarter of 2023. Individual survey data underlying the unemployment rate can help in assessing which labor market transitions account for this rise. One dominant factor appears to be a fall in the job-finding rate—the share of unemployed individuals finding employment. The duration of unemployment has also increased recently. In past decades, these patterns have frequently occurred during the onset of recessions, which suggests that these data should be closely monitored.
Journal Article
Regional Spotlight: Surveying the South Jersey Economy
After 25 years and two recessions, how well has our South Jersey Business Survey tracked the local economy?
Working Paper
Measuring Income and Wealth at the Top Using Administrative and Survey Data
Administrative tax data indicate that U.S. top income and wealth shares are substantial and increasing rapidly (Piketty and Saez 2003, Saez and Zucman 2014). A key reason for using administrative data to measure top shares is to overcome the under-representation of families at the very top that plagues most household surveys. However, using tax records alone restricts the unit of analysis for measuring economic resources, limits the concepts of income and wealth being measured, and imposes a rigid correlation between income and wealth. The Survey of Consumer Finances (SCF) solves the ...
Working Paper
All Forecasters Are Not the Same: Time-Varying Predictive Ability across Forecast Environments
This paper examines data from the European Central Bank’s Survey of Professional Forecasters to investigate whether participants display equal predictive performance. We use panel data models to evaluate point- and density-based forecasts of real GDP growth, inflation, and unemployment. The results document systematic differences in participants’ forecast accuracy that are not time invariant, but instead vary with the difficulty of the forecasting environment. Specifically, we find that some participants display higher relative accuracy in tranquil environments, while others display ...
Working Paper
A Comprehensive Empirical Evaluation of Biases in Expectation Formation
We revisit predictability of forecast errors in macroeconomic survey data, which is often taken as evidence of behavioral biases at odds with rational expectations. We argue that to reject rational expectations, one must be able to predict forecast errors out of sample. However, the regressions used in the literature often perform poorly out of sample. The models seem unstable and could not have helped to improve forecasts with access only to available information. We do find some notable exceptions to this finding, in particular mean bias in interest rate forecasts, that survive our ...
Working Paper
Survey Data and Subjective Beliefs in Business Cycle Models
This paper develops a theory of subjective beliefs that departs from rational expectations, and shows that biases in household beliefs have quantitatively large effects on macroeconomic aggregates. The departures are formalized using model-consistent notions of pessimism and optimism and are disciplined by data on household forecasts. The role of subjective beliefs is quantified in a business cycle model with goods and labor market frictions. Consistent with the survey evidence, an increase in pessimism generates upward biases in unemployment and inflation forecasts and lowers economic ...
Report
Community Education Circles in the Lawrence Public Schools: evaluation design and baseline survey data
This paper describes a plan for evaluating the Community Education Circles (CECs) program that is being implemented in the Lawrence Public Schools as part of an effort to enhance family-school engagement and improve outcomes for both students and parents. The CECs program supports the larger Lawrence Working Families Initiative, which in 2013 was awarded a multiyear grant through the Boston Fed?s Working Cities Challenge. This paper accomplishes several objectives: (1) describe the goals and methods of the CECs program as well as the larger goals of the Lawrence Working Families Initiative; ...
Journal Article
Regional Spotlight: Surveying the South Jersey Economy
After 25 years and two recessions, how well has our South Jersey Business Survey tracked the local economy?