Do monetary condition news at the zero lower bound influence households' expectations and readiness to spend?

Publisher:孙靓Publish Date:2022-10-16Views:17

Speaker: Ben WangMacquarie University

Host: Prof. Gu Xin (Southeast University)

Commentator: Lecturer Li Hao (Southeast University)

Time: 10:00am

Date: October 19th, 2022 (Friday)

Tencent Meeting ID: 407-6431-9423


We investigate how households update their interest rate and inflation expectations upon hearing monetary condition news, and to what extent this changes their readiness to spend. Using data from the Michigan Survey of Consumers from December 2008 to December 2015, we find 1) the likelihood of higher expected interest rates significantly increases upon hearing news of tighter monetary conditions; 2) monetary condition news is irrelevant for both short- and medium-run inflation expectations; 3) the main information content of this perceived news is most likely from forward guidance and professional forecasts; and 4) households update their readiness to spend on houses, cars and durable goods upon perceiving monetary condition news. Our evidence points toward interest rate expectations as the most likely mediator through which monetary condition news drives households' readiness to spend.

About Speaker:

Ben Wang is a senior lecturer at Macquarie University, where he also serves as the corporate engagement coordinator for the Department of Economics. He is the treasurer for the Economic Society Australia (NSW branch) and Chinese Economics Society Australia. His work focuses on applied macroeconomics, with recent interests on measuring and evaluating the impact of macroeconomic uncertainty, housing market dynamics, and the role of media news in driving households' expectations. He has also worked on interdisciplinary topics that are related to socioeconomic disadvantaged groups. He has published in a wide range of academic journals including Journal of Banking and Finance, Journal of Economic Behaviour and Organization, Macroeconomic Dynamics, Journal of Macroeconomics, and Journal of Business Ethics. Ben has been a guest editor for Journal of Economic Behaviour and Organization, China Economic Review and Social Indicator Research.

Translated by: Wang Xuanyu