Details
Original language | English |
---|---|
Article number | 104029 |
Number of pages | 16 |
Journal | Journal of international economics |
Volume | 153 |
Early online date | 2 Dec 2024 |
Publication status | Published - Jan 2025 |
Abstract
How do global supply-side shocks influence macroeconomic expectations? We exploit the 2022 Russian invasion of Ukraine as a natural experiment to identify the effect of a global political shock, which translated into a momentous supply-side shock, on inflation expectations. Collecting a unique survey among tenured economics professors in Germany, we find sizable effects on inflation expectations and monetary policy recommendations. A comparison with a representative sample of households shows that experts’ expectations adjust faster and to a larger degree to the shock. Text analyses on open-ended questions reveal that the effects are caused by supply-side models underlying experts’ formation of expectations.
Keywords
- 2022 Russian invasion of Ukraine, Belief formation, Economic experts, Inflation expectations, Natural experiment, Supply-side shock, Survey
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
- Finance
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
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In: Journal of international economics, Vol. 153, 104029, 01.2025.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Political shocks and inflation expectations
T2 - Evidence from the 2022 Russian invasion of Ukraine
AU - Dräger, Lena
AU - Gründler, Klaus
AU - Potrafke, Niklas
N1 - Publisher Copyright: © 2024 Elsevier B.V.
PY - 2025/1
Y1 - 2025/1
N2 - How do global supply-side shocks influence macroeconomic expectations? We exploit the 2022 Russian invasion of Ukraine as a natural experiment to identify the effect of a global political shock, which translated into a momentous supply-side shock, on inflation expectations. Collecting a unique survey among tenured economics professors in Germany, we find sizable effects on inflation expectations and monetary policy recommendations. A comparison with a representative sample of households shows that experts’ expectations adjust faster and to a larger degree to the shock. Text analyses on open-ended questions reveal that the effects are caused by supply-side models underlying experts’ formation of expectations.
AB - How do global supply-side shocks influence macroeconomic expectations? We exploit the 2022 Russian invasion of Ukraine as a natural experiment to identify the effect of a global political shock, which translated into a momentous supply-side shock, on inflation expectations. Collecting a unique survey among tenured economics professors in Germany, we find sizable effects on inflation expectations and monetary policy recommendations. A comparison with a representative sample of households shows that experts’ expectations adjust faster and to a larger degree to the shock. Text analyses on open-ended questions reveal that the effects are caused by supply-side models underlying experts’ formation of expectations.
KW - 2022 Russian invasion of Ukraine
KW - Belief formation
KW - Economic experts
KW - Inflation expectations
KW - Natural experiment
KW - Supply-side shock
KW - Survey
UR - http://www.scopus.com/inward/record.url?scp=85211218905&partnerID=8YFLogxK
U2 - 10.1016/j.jinteco.2024.104029
DO - 10.1016/j.jinteco.2024.104029
M3 - Article
AN - SCOPUS:85211218905
VL - 153
JO - Journal of international economics
JF - Journal of international economics
SN - 0022-1996
M1 - 104029
ER -