Uncertainty and Information Acquisition: Evidence from Firms and Households

80 Pages Posted: 11 Feb 2022

See all articles by Heiner Mikosch

Heiner Mikosch

ETH Zürich - KOF Swiss Economic Institute

Christopher Roth

University of Cologne

Samad Sarferaz

ETH Zurich

Johannes Wohlfart

University of Copenhagen

Multiple version iconThere are 4 versions of this paper

Date Written: December 1, 2021

Abstract

We leverage the small open economy Switzerland as a testing ground for basic premises of macroeconomic models of endogenous information acquisition, using tailored surveys of firms and households. First, we show that firms perceive a greater exposure to exchange rate movements than households, which is reflected in higher levels of information acquisition and less dispersed beliefs about past and future exchange rate realizations. Similarly, within the two samples, acquisition of exchange rate information strongly increases in various proxies for stake size. Second, households who perceive higher costs of acquiring or processing information acquire less information. Finally, an exogenous increase in the perceived uncertainty of the exchange rate increases firms' demand for a report about exchange rate developments, but not households'. Our findings inform the modeling of information frictions in macroeconomics.

Keywords: Information acquisition, Uncertainty, Expectation formation, Firms, Households.

JEL Classification: D83, D84, E71

Suggested Citation

Mikosch, Heiner and Roth, Christopher and Sarferaz, Samad and Wohlfart, Johannes, Uncertainty and Information Acquisition: Evidence from Firms and Households (December 1, 2021). Available at SSRN: https://ssrn.com/abstract=3975462 or http://dx.doi.org/10.2139/ssrn.3975462

Heiner Mikosch

ETH Zürich - KOF Swiss Economic Institute ( email )

Zurich
Switzerland

Christopher Roth

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

Samad Sarferaz

ETH Zurich ( email )

Leonhardstrasse 21
Zurich, 8092
Switzerland

Johannes Wohlfart (Contact Author)

University of Copenhagen ( email )

Øster Farimagsgade 5
Building 35
Copenhagen, DK-1353
Denmark

HOME PAGE: http://https://sites.google.com/site/johanneswohlfartecon/home

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