NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Tim Berg

Ifo Institute
Poschingerstr. 5
81679 Munich
Germany

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NBER Working Papers and Publications

March 2012Inflation Expectations and Readiness to Spend: Cross-Sectional Evidence
with Rüdiger Bachmann, Eric R. Sims: w17958
There have recently been suggestions for monetary policy to engineer higher inflation expectations so as to stimulate current spending. But what is the empirical relationship between inflation expectations and spending? We use the underlying micro data from the Michigan Survey of Consumers to test whether increased inflation expectations are indeed associated with greater reported readiness to spend. Cross-sectional data deliver the necessary variation to test whether the relationship between inflation expectations and spending changes in the recent zero lower bound regime compared to normal times, as suggested by many standard models. We find that the impact of inflation expectations on the reported readiness to spend on durable goods is statistically insignificant and small in absolute v...

Inflation Expectations and Readiness to Spend at the Zero Lower Bound: Cross-Sectional Evidence” with Rudi Bachmann and Tim Berg (January 2014), forthcoming, American Economic Journal: Economic Policy citation courtesy of

 
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