Information frictions in inflation expectations among five types of economic agents

Camille Cornand (1) , Paul Hubert (2)

1 GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne
2 OFCE - Observatoire français des conjonctures économiques (Sciences Po)

We compare disagreement in expectations and the frequency of forecast revisions among five categories of agents: households, firms, professional forecasters, policymakers and participants to laboratory experiments. We provide evidence of disagreement among all categories of agents. There is however a strong heterogeneity across categories: while policymakers and professional forecasters exhibit low disagreement, firms and households show strong disagreement. This translates into a heterogeneous frequency of forecast revision across categories of agents, with policymakers revising more frequently their forecasts than firms and professional forecasters. Households last revise less frequently. We are also able to explore the external validity of experimental expectations.

Keywords: inflation expectations; information frictions; disagreement; forecast revisions; experimental forecasts; survey forecasts; central bank forecasts

Domains: Economics and Finance

Camille Cornand, Paul Hubert. Information frictions in inflation expectations among five types of economic agents. 2021. ⟨halshs-03351632⟩