EconomicsFeatured paper
Household Inflation Expectations and Consumption Adjustment Under Persistent Price Shocks
Abstract
The paper studies how households revise consumption plans when they believe inflation will remain elevated for longer than initially expected. Combining survey data with high-frequency spending records, it finds that expectation persistence matters as much as the level of expected inflation itself. Households that interpret inflation as durable reallocate spending more aggressively toward essentials, delay discretionary purchases, and report lower confidence in medium-term financial planning.
Publication Metadata
Keywords
inflation expectationsconsumptionhousehold financeprice shocks
Citation
Daniel Kwon; Amira Solberg; Lina Petrov (2026). Household Inflation Expectations and Consumption Adjustment Under Persistent Price Shocks. Review of Applied Macro Analysis. 10.48211/insight.econ.2026.2014
Related Papers