Effects of monetary policy on household expectations: The role of homeownership

• 成果类型: Article
• 署名作者: Ahn, Hie Joo; Xie, Shihan; Yang, Choongryul
• 署名单位: Federal Reserve System - USA; Federal Reserve System Board of Governors; University of Illinois System; University of Illinois Urbana-Champaign
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2024.103599
• 发表日期: 2024
• 关键词: Inflation expectations; Homeownership; rational inattention; monetary policy; Forward guidance

摘要

We study the role of homeownership in the effectiveness of monetary policy on households' expectations based on individual-level microdata in the U.S. We find that homeowners lower their near-term inflation expectations and optimism about the labor market outlook in response to a rise in mortgage rates, while renters are less likely to do so. We further show that forward guidance shocks lead to similar differences between homeowners and renters. Our results suggest that homeowners pay attention to news on interest rates and adjust their expectations accordingly in a manner consistent with the intended effect of monetary policy. We characterize this empirical finding with a rational inattention model where mortgage payments create an incentive for homeowners to acquire information on monetary policy, unlike renters. This housing-driven endogenous attentiveness is the key mechanism behind the compelling empirical link among homeownership, attention, and the transmission of monetary policy.