Are Consumers' Spending Decisions in Line with A Euler Equation?

• 成果类型: Article
• 署名作者: Drager, Lena; Nghiem, Giang
• 署名单位: Leibniz University Hannover; Goethe University Frankfurt; Leibniz University Hannover
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_00909
• 发表日期: 2021-07
• 页码: 580-596
• 关键词: inflation-expectations

摘要

Evaluating a new survey of German consumers, we test whether individual consumption spending decisions are formed according to a Euler equation model. We find that consumers are more likely to increase current spending if they plan to increase spending in the future and if they expect higher inflation. In the subsample of financially literate households, we find an additional negative effect of nominal interest rate expectations. The effects of macroeconomic expectations become stronger if consumers observed news on monetary policy or financial markets. These news effects are particularly pronounced for consumers who save and those with low inflation forecast accuracy.