Risk Exposure and Acquisition of Macroeconomic Information
CEBI WORKING PAPER SERIES, Working Paper 24/20
62 Pages Posted: 9 Dec 2020 Last revised: 10 Apr 2021
There are 3 versions of this paper
Risk Exposure and Acquisition of Macroeconomic Information
Risk Exposure and Acquisition of Macroeconomic Information
Date Written: October 15, 2020
Abstract
We conduct an experiment with a representative sample from the US to study households’ demand for macroeconomic information. Respondents who learn of a higher personal exposure to unemployment risk during recessions increase their demand for an expert forecast about the likelihood of a recession. This finding is consistent with macroeconomic models of endogenous information acquisition, according to which the demand for information depends on its expected benefits. Moreover, respondents’ updating about their personal unemployment risk suggests that households are imperfectly informed about their exposure to aggregate fluctuations, which may distort their beliefs about the benefits of acquiring macroeconomic information.
Keywords: risk exposure, macroeconomic conditions, information acquisition, experiment
JEL Classification: D12, D14, D83, D84, E32, G11
Suggested Citation: Suggested Citation