Information Frictions Among Firms and Households
85 Pages Posted: 31 Mar 2021
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Information Frictions among Firms and Households
Information Frictions among Firms and Households
Information Frictions Among Firms and Households
Information Frictions Among Firms and Households
Date Written: 2021
Abstract
We survey samples of German firms and households to document novel stylized facts about the extent of information frictions among the two groups. First, firms’ expectations about macroeconomic variables are closer to expert forecasts and less dispersed than households’, consistent with higher information frictions among households. Second, the degree of dispersion and the distance from expert forecasts varies more across groups of households than across groups of firms. Third, firms update their policy rate expectations less than households when provided with an expert forecast, consistent with holding stronger priors. Our results have implications for modelling choices, macroeconomic dynamics, and policies.
JEL Classification: D830, D840, E710
Suggested Citation: Suggested Citation