Inflation and Attention Thresholds

26 Pages Posted: 30 Sep 2022

See all articles by Oleg Korenok

Oleg Korenok

Virginia Commonwealth University - School of Business

David Munro

Middlebury College

Jiayi Chen

Middlebury College

Date Written: September 26, 2022

Abstract

One of the dangers of high inflation is that it can cause firms and households to pay close attention to it. This internalization of inflation can lead to an accelerationist regime, making inflation harder to control. We empirically assess the relationship between attention and the level of inflation for 37 countries. Our measures of attention are constructed either from internet search behavior or the popularity of inflation mentions on Twitter. We find evidence that attention thresholds do exist for the majority of countries in our sample. We also find interesting variability across countries.

Keywords: inflation; attention; threshold

JEL Classification: E31, E52, E70

Suggested Citation

Korenok, Oleg and Munro, David and Chen, Jiayi, Inflation and Attention Thresholds (September 26, 2022). Available at SSRN: https://ssrn.com/abstract=4230600 or http://dx.doi.org/10.2139/ssrn.4230600

Oleg Korenok

Virginia Commonwealth University - School of Business ( email )

1015 Floyd Avenue
Richmond, VA 23284-4000
United States

David Munro (Contact Author)

Middlebury College ( email )

Munroe Hall
Middlebury, VT 05753
United States

Jiayi Chen

Middlebury College ( email )

Middlebury, VT 05753
United States

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