Working papers
Working papers
(JMP)
How do households beliefs respond to macroeconomic shocks? I design and field a novel survey experiment that elicits expectations about inflation and unemployment following three canonical shocks associated with unexpected changes in the monetary policy rate, oil prices, and income taxes. I compare responses to predictions from standard macroeconomic models and find substantial deviations: only 1% of respondents align with theory across all shocks. Alignment with textbook models varies by shock, and is systematically related to gender, education, income, age, and homeownership. Most households interpret all shocks as both inflationary and recessionary. Many display belief inertia, failing to revise expectations in response to the shock. Crucially, those with mental models in line with textbook frameworks are more likely to adjust their saving and spending. These findings suggest that heterogeneity in macroeconomic understanding may hinder policy transmission and exhacerbate the distributional consequences of aggregate shocks.
Accepted for presentation at: SIdE Workshop in Econometrics and Empirical Economics, Padova Workshop of Macroeconomic Expectations.
(with Yuriy Gorodnichenko)
Submitted
This paper examines how homeownership status shapes attention to inflation and its impact on durable consumption. Using randomized controlled trials on U.S. households (2021–2023), we document systematic heterogeneity in responses to inflation-related information. Homeowners exhibit greater baseline awareness and update their expectations less than renters, who respond more strongly due to lower prior knowledge. Exploiting exogenous variation in inflation expectations induced by the treatments, we find that homeowners adjust durable spending significantly, whereas renters do not. These results highlight homeownership as a key factor in the formation of inflation expectations and their influence on economic behavior.
Accepted for presentation at: ASSA 2026 Annual Meeting (Philadelphia); ifo Conference on Macroeconomics and Survey data (ifo institure), WE_ARE_IN Macroeconomics and Finance conference (ECB). Presented at: UC Berkeley Graduate Macro Symposium fall 2024 (UC Berkeley), Padova Macro talks 2025 (University of Padova).
(with Alessia Russo, Eleonora Granziera, Efrem Castelnuovo)
We investigate how education shapes households' macroeconomic beliefs by surveying Dutch households on their perceptions and forecasts of inflation, unemployment, mortgage rates, and stock prices. Our findings unveil significant differences between highly-educated and less-educated households. Highly educated respondents form beliefs consistent with a monetary policy trade-off between inflation and unemployment, whereas less-educated households adopt a "supply-side" perspective. When exposed to vignette-based scenarios simulating monetary policy shocks, highly educated individuals adjust their beliefs and consumption-saving decisions in line with intertemporal substitution and textbook economic models. In contrast, less-educated respondents often retain pre-existing beliefs or revise them using non-standard mental models. Moreover, highly educated households primarily rely on formal education and newspapers for economic information, while less-educated households are more influenced by social media. These findings point to the need to model education-related heterogeneity and communicate policy targets and decisions in a simplified manner to reach different socio-economic groups.
Presented at: Women in Macro workshop (Trinity College Dublin); Naples Workshop on Frontiers in Measurement and Survey Methods (Università Federico II Naples); Conference on Theories and Methods in Macroeconomics (CREST Paris); EAYE Annual Meeting 2025 (King’s College London); CEPR workshop on Beliefs and the Macroeconomy (UcLouvain); Summer Forum on Theoretical and Experimental Macroeconomics (BSE Barcelona); Politecnico di Milano Workshop on Inflation; Workshop on Heterogeneous Macro Expectations (FAU Nuremberg).
(with Francesco Lancia, Riccardo Rasoni, Alessia Russo)
This paper analyzes household adjustment to unexpected income and fiscal shocks along multiple margins, including consumption, savings, and debt repayment. We develop a model of heterogeneous marginal propensities to consume (MPCs) that incorporates variation in financial constraints, risk preferences, and macroeconomic expectations. To discipline the model, we field a novel household survey that elicits subjective beliefs and presents hypothetical idiosyncratic and policy-induced income shocks. Self-reported behavioral responses are matched to administrative records, allowing for identification of liquidity constraints and hand-to-mouth status.
This paper tests whether deviations from the Full-Information Rational Expectations (FIRE) benchmark vary systematically across households. Using identified oil and monetary policy shocks as sources of exogenous variation, I implement individual-level forecast error tests à la Coibion and Gorodnichenko (2012) with data from the NY Fed Survey of Consumer Expectations. The results show limited updating of inflation expectations in response to shocks, particularly among households with lower income and education. These findings reveal substantial heterogeneity in belief formation and point to systematic departures from FIRE among less-informed agents.
Presented at: UC Berkeley Graduate Macro Symposium spring 2024 (UC Berkeley), DSEA internal seminar series (University of Padova).