Information rigidities, inflation perceptions, and the media: Lessons from the euro cash changeover
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Information rigidities, inflation perceptions, and the media : Lessons from the euro cash changeover. / Lamla, Michael J.; Lein, Sarah M.
in: Economic Inquiry, Jahrgang 53, Nr. 1, 01.01.2015, S. 9-22.Publikation: Beiträge in Zeitschriften › Zeitschriftenaufsätze › Forschung › begutachtet
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TY - JOUR
T1 - Information rigidities, inflation perceptions, and the media
T2 - Lessons from the euro cash changeover
AU - Lamla, Michael J.
AU - Lein, Sarah M.
PY - 2015/1/1
Y1 - 2015/1/1
N2 - The objective of theoretical models of information rigidities is to capture the fact that people are constrained in their ability to acquire and process all available information. Given that most people obtain their information about the economy from the media, press coverage of the economy may exert an influence on peoples' attitudes. This paper tests for this influence by examining consumers' inflation perceptions in the aftermath of the euro cash changeover, which serves as a natural experiment. Using a new data set, that quantifies the intensity and tone of media reports, we document that media reporting has had a statistically significant and economically meaningful impact on inflation perceptions and contributed to their sharp rise in the aftermath of the euro cash changeover and to the divergence between inflation perceptions and actual inflation rates. (JEL E53, D83).
AB - The objective of theoretical models of information rigidities is to capture the fact that people are constrained in their ability to acquire and process all available information. Given that most people obtain their information about the economy from the media, press coverage of the economy may exert an influence on peoples' attitudes. This paper tests for this influence by examining consumers' inflation perceptions in the aftermath of the euro cash changeover, which serves as a natural experiment. Using a new data set, that quantifies the intensity and tone of media reports, we document that media reporting has had a statistically significant and economically meaningful impact on inflation perceptions and contributed to their sharp rise in the aftermath of the euro cash changeover and to the divergence between inflation perceptions and actual inflation rates. (JEL E53, D83).
KW - Economics
UR - http://www.scopus.com/inward/record.url?scp=84911990548&partnerID=8YFLogxK
U2 - 10.1111/ecin.12121
DO - 10.1111/ecin.12121
M3 - Journal articles
AN - SCOPUS:84911990548
VL - 53
SP - 9
EP - 22
JO - Economic Inquiry
JF - Economic Inquiry
SN - 0095-2583
IS - 1
ER -