Inflation disasters and consumption

• 成果类型: Article
• 署名作者: Ryngaert, Jane M.
• 署名单位: Wake Forest University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2022.03.002
• 发表日期: 2022
• 页码: S67-S81
• 关键词: Inflation expectations; Expected consumption; Issuance costs; Tail risk

摘要

Consumers with longer-tailed subjective probability distributions of inflation anticipate lower real consumption growth and are more favorably inclined to purchasing durable goods. I propose a model in which rare inflation disasters increase the cost of future credit by raising debt issuance costs, prompting consumers to stock up on debt and move purchases to the present. Consistent with this theory, consumers with longer-tailed distributions anticipate higher future interest rates. The effects of anticipated tail risks on consumption plans are more pronounced among credit market participants. (c) 2022 Elsevier B.V. All rights reserved.