Universität Bonn

Department of Economics

MEF/ECONtribute Seminar Summersemester 2023

Alexandre Kohlhas (Oxford), 05.04.2023

We document systematic differences in macroeconomic expectations across U.S. households and rationalize our findings with a theory of information choice. We embed this theory into an incomplete-markets model with aggregate risk. Our model is quantitatively consistent with the pattern of expectation heterogeneity in the data. Relative to a full-information counterpart, our model implies substantially increased macroeconomic volatility and inequality. We show through the example of a wealth tax that neglecting the information channel leads to erroneous conclusions about the effects of macroeconomic policies. While in the model without information choice a wealth tax reduces wealth inequality, in our framework it reduces information acquired in the economy, leading to increased volatility and higher top-end wealth inequality in equilibrium.

Coauthors: Tobias Broer, Kurt Mitman, Kathrin Schlafmann
Wednesday, 05.04.23 - 12:15 PM - 01:30 PM
Expectation and Wealth Heterogeneity in the Macroeconomy
Juridicum, Adenauerallee 24-42
Faculty Room
not required
Institute for Macroeconomics and Econometrics
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