Lifetime Memories of Inflation: Evidence from Surveys and the Lab

Purchase - $5 NBER Subscribers Download Add Paper to My Library Share: Permalink Using these links will ensure access to this page indefinitely Copy URL Lifetime Memories of Inflation: Evidence from Surveys and the Lab NBER Working Paper No. w31996 81 Pages Posted: 2 Jan 2024 See all articles by Isabelle SalleIsabelle SalleUniversity of OttawaYuriy GorodnichenkoUniversity of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor EconomicsOlivier CoibionUniversity of Texas at Austin Date Written: December 2023 Abstract We study how individuals' memories of inflation shape their expectations about future inflation using both surveys and laboratory experiments. Recalling having lived through prior disinflations has pronounced effects on how long-lived people expect the current inflation episode to last. Information treatments in which we show people prior disinflationary experiences similarly strongly reduce inflation expectations of individuals on average and are often recalled as inflation memories months later. We also show that when people try to forecast inflation in the lab, the inflation dynamics in the game can affect their beliefs much like the inflation experienced in real life. Methodologically, we compare and contrast surveys and lab experiments and discuss the pros and cons of each method, emphasizing the general consistency across the two methodologies.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org. Suggested Citation: Suggested Citation Salle, Isabelle and Gorodnichenko, Yuriy and Coibion, Olivier, Lifetime Memories of Inflation: Evidence from Surveys and the Lab (December 2023). NBER Working Paper No. w31996, Available at SSRN: https://ssrn.com/abstract=4680724 Isabelle Salle (Contact Author) University of Ottawa ( email ) 2292 Edwin CrescentOttawa, K2C 1H7Canada Yuriy Gorodnichenko University of California, Berkeley - Department of Economics ( email ) 549 Evans Hall #3880Berkeley, CA 94720-3880United States HOME PAGE: http://www.econ.berkeley.edu/~ygorodni/index.htm National Bureau of Economic Research (NBER) ( email ) 1050 Massachusetts AvenueCambridge, MA 02138United States IZA Institute of Labor Economics ( email ) P.O. Box 7240Bonn, D-53072Germany Olivier Coibion University of Texas at Austin ( email ) 2317 SpeedwayAustin, TX Texas 78712United States Purchase - $5 NBER Subscribers Download Do you have negative results from your research you'd like to share? Submit Negative Results Paper statistics Downloads 5 Abstract Views 61 34 References PlumX Metrics Related eJournals NBER Working Paper Series Follow NBER Working Paper Series Subscribe to this free journal for more curated articles on this topic FOLLOWERS 12,251 PAPERS 32,601 Feedback Feedback to SSRN Feedback (required) Email (required) Submit If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.