Risk Exposure and Acquisition of Macroeconomic Information

62 Pages Posted: 20 Oct 2020

See all articles by Christopher Roth

Christopher Roth

University of Warwick, Faculty of Social Studies, Department of Economics, Students

Sonja Settele

University of Copenhagen; CEBI

Johannes Wohlfart

University of Copenhagen

Multiple version iconThere are 3 versions of this paper

Date Written: 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. Our findings are consistent with the basic premise of theories of rational inattention that demand for information depends on its expected benefit. Moreover, the fact that perceived risk exposure responds to information highlights frictions in households’ knowledge about the personal relevance of particular pieces of information. Our findings inform the modeling of information frictions in macroeconomics.

Keywords: risk exposure, macroeconomic conditions, information acquisition, experiment

JEL Classification: D120, D140, D830, D840, E320, G110

Suggested Citation

Roth, Christopher and Settele, Sonja and Wohlfart, Johannes, Risk Exposure and Acquisition of Macroeconomic Information (2020). CESifo Working Paper No. 8634, Available at SSRN: https://ssrn.com/abstract=3715286

Christopher Roth (Contact Author)

University of Warwick, Faculty of Social Studies, Department of Economics, Students ( email )

Coventry, CV4 7AL
United Kingdom

Sonja Settele

University of Copenhagen ( email )

Germany

CEBI ( email )

Denmark

HOME PAGE: http://https://www.econ.ku.dk/cebi/

Johannes Wohlfart

University of Copenhagen ( email )

Nørregade 10
Copenhagen, København DK-1165
Denmark

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