Research

Abstract: We study how housing-market signals shape beliefs about economic opportunity. Using a randomized information experiment in Singapore, we vary exposure to information about housing price dynamics and housing-related policy signals, then elicit expected social mobility for children from low- and high-social-position families. We find asymmetric belief updating. Rising house prices and higher property taxes lower perceived upward mobility for children from low-social-position families, while leaving beliefs about children from high-social-position families largely unchanged. By contrast, information about slower price growth and expanded subsidies does not produce a corresponding increase in perceived mobility. Our results identify an attainability-based channel of belief formation: housing-market signals shape opportunity beliefs by changing whether advancement appears within reach.

Abstract: We study when inflation expectations are interpreted as signals of firms’ long-run growth. Using U.S. analyst forecasts matched to forward-looking measures of expected inflation, we show that higher inflation expectations predict upward revisions in long-term earnings growth forecasts, particularly after 2001. These revisions are not matched by stronger subsequent realized earnings growth, generating predictable forecast errors. Cross-sectional evidence across analysts and firms supports a belief-based interpretation in which inflation expectations increasingly enter long-run growth forecasts as growth signals. Our findings provide direct evidence on how inflation expectations shape equity-side growth beliefs and help explain how inflation can be interpreted as growth news in the post-2000 stock-bond regime.

Abstract: This paper studies the effects of monetary policy innovations on firm investment in China and the role of intangible assets in shaping monetary policy transmission. We construct a composite monetary policy index and extract policy innovations to study firm-level investment responses. The results show that expansionary monetary policy increases firm investment on average, but the response is significantly weaker for firms with higher intangible asset intensity. A one standard deviation increase in the intangible asset ratio reduces the investment response to a one standard deviation expansionary policy innovation by 23 to 39 basis points. A simple dynamic investment model, along with supporting evidence, highlights the financing and depreciation channels. Additionally, the moderation effect differs across ownership types, strategic industries, and regional financial development. These findings suggest that the rising importance of intangible capital dampens monetary policy transmission through the investment channel.