Figure B.1: Cross-sectional distribution of inflation expectations
(a)Full sample
0 .05 .1 .15 .2
Fraction
-50 -40 -30 -20 -10 0 10 20 30 40 50
Expected inflation in percent
(b)Values between -15% and 25%
0 .05 .1 .15 .2
Fraction
-15 -10 -5 0 5 10 15 20 25
Expected inflation in percent
Notes: Histograms how quantitative inflation expectations for the next 12 months from the Michigan Survey of Consumers, from January 1994 to December 2016.
Table B.1: Demographic distribution in different samples
All With Base- All With
Base-exp. line exp. line
Gender Education
Male 0.47 0.49 0.50 High school or less 0.34 0.32 0.30
Female 0.53 0.51 0.50 Some college, no degree 0.26 0.27 0.26
Renter/owner College degree 0.24 0.25 0.26
Owns home 0.76 0.77 0.80 Graduate studies 0.16 0.17 0.18
Rents home 0.24 0.23 0.20 Income
Cohort bottom 33% 0.27 0.25 0.23
Born before 1970 0.81 0.80 0.83 middle 33% 0.34 0.35 0.35
Born 1970 and later 0.19 0.20 0.17 top 33% 0.38 0.40 0.42
Age Investment
18-39 years 0.30 0.30 0.28 No stocks 0.44 0.41 0.37
40-59 years 0.39 0.40 0.41 Inv. in bottom 33% 0.17 0.17 0.18 60 years and older 0.31 0.30 0.31 Inv. in middle 33% 0.18 0.19 0.21 Inv. in top 33% 0.20 0.22 0.24 Notes:‘With exp.’ refers to households who provided an answer to the question on quantitative inflation expectations for the next 12 months (Q2). ‘Baseline’ refers to sample of household responding twice to the survey and reporting inflation expectations both times. Specific household types are more likely not to respond to the inflation expectations question, and not to respond to the second interview. This leads to differences in the shares in both samples. Generally, women and households with a lower socio-economic status are less likely to respond twice and to respond to inflation expectations.
CHAPTER 2. MONETARYPOLICY AND HOUSEHOLDEXPECTATIONS 80
Table B.2: List of newspaper included and number of articles
Newspaper No. art. Newspaper No. art.
1 The New York Times 678 36 San Gabriel Valley Tribune 18
2 The Washington Post 417 37 The Hill 14
3 Pittsburgh Post-Gazette 243 38 Inland Valley Daily Bulletin 13
4 Charleston Gazette 207 39 The Detroit News 11
5 St.Louis Post-Dispatch 169 40 The New York Sun 9
6 Telegraph Herald 164 41 Fort Wayne Journal-Gazette 8
7 Deseret Morning News 155 42 San Bernardino Sun 8
8 St.Paul Pioneer Press 148 43 Lowell Sun 7
9 Bismarck Tribune 126 44 Pasadena Star- News 7
10 The Philadelphia Inquirer 118 45 Long Island Business News 6
11 San Jose Mercury News 113 46 Alameda Times-Star 5
12 The Columbian 89 47 New Orleans City Business 5
13 Chicago Daily Herald 70 48 Lincoln Journal Star 4
14 South Bend Tribune 69 49 San Mateo County Times 4
15 WashingtonPost.com 68 50 Tri-Valley Herald 4
16 The Pantagraph 66 51 Daily Journal of Commerce 3
17 Austin American-Statesman 63 52 Intelligence Journal 3
18 The Atlanta Journal and Con-stitution
59 53 Long Beach Press-Telegram 3
19 Monterey County Herald 51 54 Marin Independent Journal 3
20 Dayton Daily News 48 55 Santa Fe New Mexican 3
21 The Daily Record 46 56 Tampa Bay Times 3
22 The New York Post 44 57 The Wall Street Journal 3
23 The Tampa Tribune 43 58 Daily Camera 2
24 Pittsburgh Tribune Review 39 59 The Daily Record of Rochester 2
25 The Orange County Register 38 60 The Evening Sun 2
26 St.Petersburg Times 37 61 Colorado Springs Business Journal
1
27 Wisconsin State Journal 36 62 Finance & Commerce 1
28 Daily News 28 63 Mississippi Business Journal 1
29 The Daily News of Los Ange-les
27 64 New York Observer 1
30 Inside Bay Area 25 65 Roll Call 1
31 Philadelphia Daily News 25 66 The Indianapolis Business Journal
1
32 Star Tribune 22 67 The Mecklenburg Times 1
33 The Oklahoman 21 68 Tribune-Review 1
34 Capital Times 20 69 Wyoming Tribune-Eagle 1
35 Creators Syndicate 19 Total 3750
Notes:List of all newspapers from which articles are used in the analysis, i.e. all articles from LexisNexis database published in US newspapers within seven days of FOMC meetings in the sample period, and containing the three keywords ‘inflation’, ‘central bank’ and ‘fed’.
Table B.3: Demographics and news heard
Dependent var.: indicator of having heard news int
(1) (2) (3) (4)
General Economic situation Inflation Interest rates
Female -0.03*** 0.01 -0.09*** -0.18***
(0.01) (0.01) (0.01) (0.02)
Income, bottom 33% -0.15*** -0.14*** -0.00 -0.29***
(0.01) (0.01) (0.02) (0.03)
Income, middle 33% -0.08*** -0.06*** -0.01 -0.15***
(0.01) (0.01) (0.02) (0.02)
HS degree or less -0.60*** -0.45*** -0.14*** -0.43***
(0.01) (0.01) (0.02) (0.02)
Some college, no degree -0.30*** -0.21*** -0.04** -0.25***
(0.01) (0.01) (0.02) (0.02)
College degree -0.14*** -0.08*** 0.01 -0.06***
(0.01) (0.01) (0.02) (0.02)
Rent -0.02* -0.05*** -0.03* -0.08***
(0.01) (0.01) (0.02) (0.02)
No stocks -0.34*** -0.28*** -0.11*** -0.20***
(0.01) (0.01) (0.02) (0.02)
Stocks, bottom 33% -0.11*** -0.08*** -0.02 -0.07***
(0.01) (0.01) (0.02) (0.02)
Stocks, middle 33% -0.11*** -0.08*** -0.04** -0.06***
(0.01) (0.01) (0.02) (0.02)
18-39 years -0.23*** -0.18*** -0.06*** 0.15***
(0.01) (0.01) (0.02) (0.02)
40-59 years 0.04*** 0.05*** 0.12*** 0.20***
(0.01) (0.01) (0.02) (0.02)
Constant 0.96*** 0.52*** -1.41*** -1.40***
(0.01) (0.01) (0.02) (0.02)
Observations 109898 100160 110394 110394
Pseudo R2 0.06 0.04 0.01 0.06
Notes:FF surprise: surprise change in the 3-month federal funds future around FOMC meet-ings. Baseline categories are male, income in top 33%, graduate degree, homeowner, stockowner with inv. amount in top 33%, and 60 years and older. Dependent variables are dummy variables, where 1 indicates household heard news referring to the topic in the column header. 0 indicates no news heard. Details on news questions can be found in Appendix B2.2. Coefficients are from probit estimations. Cluster-adjusted robust standard errors in parentheses. *p<0.1, **p<0.05, ***p<0.01.
CHAPTER 2. MONETARYPOLICY AND HOUSEHOLDEXPECTATIONS 82
Table B.4: Effect for additional demographic groups Dependent var.: inflation expectations int
(1) (2) (3) (4) (5)
Age Cohort Joint spec. 1 Joint 2 Joint 3
FF surprise,t-1 0.96 0.97* 0.84 2.84* 1.62
(1.03) (0.54) (0.79) (1.63) (1.97)
18-39 years× 0.60 1.25
FF surprise,t-1 (1.40) (2.56)
40-59 years× -0.35 1.77
FF surprise,t-1 (1.27) (1.66)
Born 1970 and later× 0.17 0.78
FF surprise,t-1 (1.50) (2.71)
Female× -0.22 -1.39 -1.33
FF surprise,t-1 (1.05) (1.39) (1.40)
Rent× -1.93 -1.31 -1.56
FF surprise,t-1 (1.40) (1.88) (1.93)
Income, bottom 33%× 0.39 -0.16 0.48
FF surprise,t-1 (1.61) (2.21) (2.29)
Income, middle 33%× 1.45 2.11 2.30
FF surprise,t-1 (1.18) (1.71) (1.73)
HS degree or less× -0.64 -0.77
FF surprise,t-1 (2.03) (2.04)
Some college, no degree× -2.96 -3.06
FF surprise,t-1 (2.01) (2.01)
College degree× -0.61 -0.75
FF surprise,t-1 (1.85) (1.85)
No stocks× 0.31 0.10
FF surprise,t-1 (2.10) (2.13)
Stocks, bottom 33%× -1.60 -2.07
FF surprise,t-1 (2.27) (2.34)
Stocks, middle 33%× 1.33 1.12
FF surprise,t-1 (1.94) (1.99)
Gas price inflation,t 0.04*** 0.04*** 0.04*** 0.04*** 0.04***
(0.00) (0.00) (0.00) (0.00) (0.00) Food price inflation,t 0.62*** 0.62*** 0.65*** 0.87*** 0.89***
(0.06) (0.06) (0.07) (0.09) (0.09)
Observations 86542 86540 79924 53716 59982
Households 43271 43270 39962 26858 33193
Within R2 0.01 0.01 0.01 0.01 0.01
Notes: FF surprise: surprise change in the 3-month federal funds future around FOMC meetings. Inflation expectations are from the Michigan Survey of Consumers, and refer to the next 12 months. Realized inflation is measured as the month-on-month change in the price level for food and gasoline products, respectively. Baseline categories are (1) 60 years and older, (2) born before 1970, (3)-(5) male, income in top 33%, graduate degree, homeowner, stockowner with inv. amount in top 33%, 60 years and older, and born before 1970. Cluster-adjusted robust standard errors in parentheses. *p < 0.1, **
p<0.05, ***p<0.01.
Table B.5: Monetary policy and self-reported news Dependent variable: type of news heard on economy inflation interest rates
(1) (2) (3) (4) (5) (6)
FF surprise,t-1 0.05 0.05 0.83** 0.74** 1.63*** 1.65***
(0.13) (0.13) (0.34) (0.34) (0.52) (0.52)
Gas price inflation,t 0.00*** 0.01*** -0.00
(0.00) (0.00) (0.00)
Food price inflation,t 0.07*** -0.00 -0.03
(0.02) (0.07) (0.07)
Observations 22892 22892 1026 1026 960 960
Households 11446 11446 513 513 480 480
Within R2 0.00 0.01 0.01 0.09 0.02 0.02
Notes: FF surprise: surprise change in the 3-month federal funds future around FOMC meetings. Realized inflation is measured as the month-on-month change in the price level for food and gasoline products, respectively. Dependent variables are dummy variables, where 1 indicates ‘good/better’ for economy news and
‘high/increasing’ for inflation and interest rates. 0 indicates the opposite. Cases of contradicting news or no news are excluded. Details on news questions can be found in Appendix B2.2. Coefficient results from a fixed effects regression.
Cluster-adjusted robust standard errors in parentheses. * p < 0.1, ** p < 0.05, ***
p<0.01.
CHAPTER 2. MONETARYPOLICY AND HOUSEHOLDEXPECTATIONS 84
Table B.6: Expectations, monetary policy and self-reported news Dep. var.: inflation exp. int
(1) (2) (3)
Economic sit. Inflation Interest rates
FF surprise,t-1 1.00** 0.93* 0.97*
(0.50) (0.50) (0.50)
Good/better situation 0.02 (0.04)
Bad/worse situation -0.04
(0.04)
Contradicting news 0.11**
(0.05)
Higher prices/increasing infl. 0.69***
(0.08) Lower prices/decreasing infl. -0.27***
(0.10)
Higher interest rates 0.15*
(0.08)
Lower interest rates -0.14*
(0.08) Gas price inflation,t 0.04*** 0.04*** 0.04***
(0.00) (0.00) (0.00)
Food price inflation,t 0.62*** 0.60*** 0.63***
(0.06) (0.06) (0.06)
Observations 86988 86988 86988
Households 43494 43494 43494
Within R2 0.01 0.01 0.01
Notes: FF surprise: surprise change in the 3-month federal funds future around FOMC meetings. Inflation expectations are from the Michigan Survey of Con-sumers, and refer to the next 12 months. Realized inflation is measured as the month-on-month change in the price level for food and gasoline products, respectively. Additional explanatory variables are dummy indicators for type of news heard on different topics: economic situation in column (1), inflation in column (2) and interest rates in column (3). Cluster-adjusted robust standard errors in parentheses. *p<0.1, **p<0.05, ***p<0.01.