Research

"How do unexpected monetary policy rate announcements affect households’ inflation expectations?"
Revise and resubmit, Journal of Money, Credit and Banking
Abstract: I study how Swedish households’ inflation expectations respond to unexpected (as viewed by financial markets) information contained in monetary policy decisions over the period 2003–2016. My results suggest that households’ inflation expectations respond to the sign and magnitude of monetary policy surprises: contractionary (expansionary) surprises are associated with upward (downward) revisions in households’ inflation expectations, although these effects are not statistically significant across specifications. I find that the results differ across time periods: the baseline patterns are driven by the great financial crisis (2008–2009), a period of elevated and volatile inflation, while no statistically significant effects are detected in more stable periods. This pattern is consistent with the notion that households pay more attention to monetary policy surprises when inflation is relatively important to them, i.e., when inflation is high and volatile. One alternative interpretation of the results is that policy rate announcements convey the central bank’s private information regarding the future path of inflation. Specifically, I classify each monetary policy surprise as either policy-driven or information-driven, and I show that the positive response of inflation expectations is present only for information-driven surprises. The response of inflation expectations exhibits some variation across household characteristics, but differences across most sub-groups are not statistically significant. The clearest evidence of heterogeneity is by gender, with men responding more strongly than women.

"Inflation and human capital investment decisions" Joint with Núria Rodríguez-Planas
CESifo Working Paper No. 12473, and IZA Discussion Paper No. 18405, February 2026.
Abstract: This study investigates the impact of inflation on human capital investment decisions. Using a specially designed survey we estimate the causal effect of recent price level increases on the graduation plans of over 1,200 U.S. university students. We find that inflation caused over half of the respondents to alter their plans, with nearly 60 percent of these opting to accumulate less human capital and the remainder increasing their human capital by taking additional courses or pursuing double majors or advanced degrees. A comparison of empirical treatment estimates to predictions derived from our theoretical framework reveals that inflation-driven higher direct costs reduced human capital investments, particularly among those for whom inflation had reduced their ability to pay bills. Conversely, while some students merely postponed graduation because they believed inflation would not persist, higher inflation-induced uncertainty in the post-graduation labor market generally caused greater human capital accumulation, especially among economically vulnerable students and those whose confidence in finding a job after graduation had declined. The study concludes with policy implications, contributing new insights into how macroeconomic shocks affect educational choices.

"Inflation expectations of rationally inattentive consumers"
Abstract:  Why do consumers’ expenditure patterns matter for their inflation expectations? I propose a model of rational inattention where a consumer trades off paying attention between goods bought more or less frequently. For each good purchased, the consumer observes the rate of price change with an error that depends on the frequency at which the good is purchased. Goods bought less frequently are observed with a greater level of error. I apply a simple version of the model where the inflation index is decomposed into two sub-index components; one sub-index contains goods bought often, and the other contains goods that are not bought often. My results show that the consumer pays more attention to goods bought often. The model is able to match about 60% of the variation in the inflation expectations of the average Swedish household over the time period 2002-2017. A decomposition of the model shows that the consumer’s attention allocation trade-off between these two sub-index components is an important factor in the model’s ability to explain the variation in inflation expectations expressed by Swedish households.

"What is the effect of a dual taxation reform on wealth inequality?" Joint with Charlotte Paulie and Markus Ridder
Abstract: For the past several decades, wealth inequality has increased in many countries. Do changes in the tax system contribute to these trends? Using a quantitative model, we examine the effect on wealth inequality of changing from a comprehensive to a dual tax system. We start with a standard open-economy incomplete-markets model, to which we add an entrepreneurial sector. The entrepreneurs in the model exploit the duality of the tax system after the reform by declaring income as capital (taxed at a flat rate) rather than labor income (taxed progressively). The model is parameterized to match the characteristics of the Swedish economy under dual taxation. In contrast to previous studies, we estimate the parameters of the stochastic process for entrepreneurial income using micro-data observations. We find that the introduction of a dual tax system increases wealth inequality and that the possibility of the entrepreneurs to declare income as capital plays an important role for this result. We also find that the level of aggregate capital and the share of entrepreneurs is higher in an economy with a dual tax system.