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16. Januar 2019


"News-driven inflation expectations and information rigidities"


16. Januar 2019


Joan Robinson Room
DIW Berlin
Room 3.3.002a
Mohrenstraße 58
10117 Berlin


Leif Anders Thorsrud, Norges Bank

We investigate the role played by the media in the expectations formation process of households. Using a novel news-topic-based approach we show that the news types the media choose to report on are good predictors of households' stated ination expectations. In turn, in a noisy information model setting, augmented with a simple media channel, we show that the underlying time series properties of relevant news topics explain the time-varying information rigidity among households. As such, we not only provide a new estimate on the degree of time variation in households' information rigidity, but also provide, using a large news corpus and machine learning algorithms, robust and new evidence highlighting the role of the media for understanding ination expectations and information rigidities.


Leif Anders Thorsrud, Norges Bank