Work in progress

Belief Disagreement, Instability, and Uncertainty under Stochastic Recall 

• with Li Tang and Michael Weber, revised July 2026,  paper download   CEPR DP CESifo WP

Summary:

• Recall of the same information (e.g., histories of inflation or stock returns) varies across people and over time. 

• Expectations depend not only on information sets, but on the information people retrieve.

• We model agents as optimally updating from stochastically recalled signals. 

• Even under common information, common priors, and Bayesian updating, stochastic recall generates disagreement, belief instability, and heterogeneous uncertainty. 

• We theoretically and empirically examine how informational ambivalence, recall probability, and contextual cues shape these outcomes, and find consistent evidence across experiments and survey expectations data.

Presentations (including scheduled): Behavioral Macro workshop (NTU Singapore), Harvard Business School (by coauthor),  Workshop "Expectations in Dynamic Macro Models" (U of Sydney), Bank of Finland, Deutsche Bundesbank (Frankfurt), CEBRA (Copenhagen), Copenhagen Business School, Universities of Bath, Reading, Sheffield, Macau, CERGE-EI (Prague), HKUST,  Peking U (NSD), Shanghai Jiaotong U, Peking U (PHBS), Nanjing Audit  U (Nanjing), SUFE (Finance), Workshop on "Uncertainty, Economic Activity, and Policy" (Warsaw School of Economics), Workshop on International Macro and Finance (Macau), WESEAMS (Kuala Lumpur), International workshop on Experiments in Macro and Finance (U of Osaka), First Workshop on Surveys and Experiments in Economics (China & online), BNBU (Zhuhai), SDTBU (Yantai), Macro workshop (Shandong U) 

Polarization Through Memory

• with Li Tang and Michael Weber, August 2026

• Presentations: Humboldt U of Berlin 

Summary:

• We propose and test a new memory-based mechanism linking political identity to belief polarization, within-group disagreement, and confidence.

• Consistent with the model, new survey evidence reveals that partisan gaps in recalled economic news are large and reverse when the party controlling the White House changes.

• Theoretically and empirically, we show that:  

  1. Rehearsing identity-congruent information increases its accessibility in memory, polarizing beliefs across groups, reducing disagreement within groups, and increasing confidence—even when individuals receive the same information; 

  2. Even information-free cues can shift confidence in opposite directions across partisan groups by changing which stored information is retrieved.

Information Treatments, Hypotheticals, and Event Studies: Comparative Estimates 

• with Carola Binder, Dimitris Georgarakos and Li Tang, revised August 2026, paper download   NBER wp 

• Presentations: Yonsei U (Seoul), Shandong U (Jinan), SWUFE (Chengdu), Nanjing U (Nanjing), WESEAMS (HKUST), Empirical Macro and Finance workshop (Macau, by coauthor)

Pei Kuang, Michael Weber, and Shihan Xie. Central Bank Communication with the Polarized Public

•  CEPR DP , NBER wp, BFI wp, SSRN.  Media coverage: VoxEU column, BFI research brief, Financial Times (article, link), Ifo Schnelldienst, Bloomberg, Central Banking, Reuters

• Presentations: CEPR Central Bank Communication RPN seminar series, CEBRA (Boston), Sungkyunkwan U (Seoul). 

• Presentations by co-authors (incomplete): Bank of Korea International Conference "Central Banks and the Future of Money" 

Output gap estimation and monetary policy with imperfect knowledge (with Kaushik Mitra and Li Tang)

•  paper download, revised August 2026   longer version

• Presentations: Czech National Bank Conference on Expectations in Dynamic Macroeconomic Models (Prague), UIUC, U of Osaka, Banco de la República Central Bank Modelling workshop (Bogotá, Colombia), Bank of Albania South-Eastern European Economic Research Workshop (Tirana, Albania).

Net Zero and Inflation Expectations: the Role of Monetary and Fiscal Policies 

• with Li Tang, Yao Yao and Yuteng Zhang, paper download SSRN

Remembered Performance: Electoral Accountability under Stochastic Recall (with Li Tang) 

• SSRN download, preliminary draft

Pei Kuang, Michael Weber, and Shihan Xie. Perceived Political Bias of the Federal Reserve 

• Journal of the European Economic Association, revise and resubmit 

• paper download  BFI research brief, VoxEU column, SSRN. BFI wp no. 2024 -134, NBER wp no. 33071

• Media coverage: Central Banking, Bloomberg (article 1, article 2), Financial Times (article, link), Ifo Schnelldienst,  LinkedIn, CFO Dive, MSN, Financial post, Brookings institution, TT News, PressReader, Allnews, Yahoo (Finance, Taiwan, Hong Kong)....

• Presentations: Kiel-CEPR conference “Monetary policy after the inflation surge” (Berlin), Bank of Finland and CEPR Joint Conference on Frontiers of Monetary Economics in the 21st century: Where and Where to? (Helsinki), Korea U (Seoul).

• Presentations by coauthors (incomplete): Federal Reserve Board, Politics in Finance Conference (Georgetown University), HKU Macro workshop, St Louis Fed Applied Time Series Econometrics workshop

Observability and equilibrium selection in New Keynesian Models paper download, under revision

• Presentations: U Melbourne, NUS, SMU, NTU, ES Asian meeting (Hong Kong), ES European meeting (Lisbon)

Unconditional Treatment Effects in Information Provision Experiments (with Carola Binder and Li Tang)

Reducing Memory Biases in Belief Formation (with Li Tang and Michael Weber)

How does inflation shape house price expectations? (with Wei Cui, Xie and Y. Zhang) paper

Bank credit constraints, expectation, and firm activities: evidence from UK SMEs (with Mitra, Y. Wu, and Tianshu Zhao) paper

Learning with Data (Quasi-)Differencing  paper