{
  "title": "Public Debt and Household Inflation Expectations",
  "publication": "IMF Working Papers, March 17, 2023",
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  "summary": "We use randomized controlled trials in the US, UK, and Brazil to examine the causal effect of public debt on household inflation expectations. We find that people underestimate public debt levels and increase inflation expectations when informed about the correct levels.",
  "sections": [
    {
      "heading": "Study design and scope",
      "content": "- Randomized controlled trials conducted in the US, UK, and Brazil to examine the causal effect of public debt on household inflation expectations.\n- Publication: IMF Working Papers, Working Paper No. 2023/066.\n- Authors: Francesco Grigoli, Damiano Sandri.\n- Date: March 17, 2023.\n- Pages: 37\n- Volume: 2023\n- Issue: 066\n- DOI: https://doi.org/10.5089/9798400235214.001\n- Stock No: WPIEA2023066\n- ISBN: 9798400235214\n- ISSN: 1018-5941"
    },
    {
      "heading": "Key empirical findings",
      "content": "- People underestimate public debt levels.\n- When informed about the correct levels of public debt, households increase their inflation expectations.\n- The magnitude of revisions to inflation expectations is proportional to the size of the information surprise.\n- Confidence in the central bank considerably reduces the sensitivity of inflation expectations to public debt.\n- Households associate high public debt with stagflationary effects.\n- The sensitivity of inflation expectations to public debt is considerably higher for women and for low-income individuals."
    },
    {
      "heading": "Concepts, subjects, and keywords covered",
      "content": "- Subject areas: Central banks, Inflation, Inflation targeting, Monetary policy, Prices, Public debt, Quasi-fiscal operations.\n- Keywords appearing in the source text: Capital controls, capital outflows, financial crises, Global, household inflation expectation, increase inflation expectation, Inflation, inflation expectation, Inflation targeting, public debt level, Quasi-fiscal operations, sensitivity of inflation expectation."
    },
    {
      "heading": "Implications (as reported in the study)",
      "content": "- Information provision about public debt levels affects household inflation expectations; larger information surprises produce larger expectation adjustments.\n- Trust in monetary authorities (central bank confidence) can mitigate the pass-through from public debt information to household inflation expectations.\n- Heterogeneity in responses suggests distributional considerations: women and low-income individuals are more responsive to public debt information in forming inflation expectations.\n- Perceptions linking high public debt to stagflationary outcomes imply that public debt communication and fiscal policy credibility can influence inflation beliefs beyond immediate fiscal mechanics.\n\nIMF Working Paper No. 2023/066 — \"Public Debt and Household Inflation Expectations\" by Francesco Grigoli and Damiano Sandri, March 17, 2023.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2023/03/20/public-debt-and-household-inflation-expectations-530644"
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    "Authors: Francesco Grigoli, Damiano Sandri",
    "Published: March 17, 2023",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798400235214.001",
    "Randomized controlled trials conducted in the US, UK, and Brazil to examine the causal effect of public debt on household inflation expectations.",
    "Publication: IMF Working Papers, Working Paper No. 2023/066.",
    "Authors: Francesco Grigoli, Damiano Sandri.",
    "Date: March 17, 2023.",
    "Pages: 37",
    "Volume: 2023",
    "Issue: 066",
    "DOI: https://doi.org/10.5089/9798400235214.001",
    "Stock No: WPIEA2023066",
    "ISBN: 9798400235214",
    "ISSN: 1018-5941",
    "People underestimate public debt levels.",
    "When informed about the correct levels of public debt, households increase their inflation expectations.",
    "The magnitude of revisions to inflation expectations is proportional to the size of the information surprise.",
    "Confidence in the central bank considerably reduces the sensitivity of inflation expectations to public debt.",
    "Households associate high public debt with stagflationary effects.",
    "The sensitivity of inflation expectations to public debt is considerably higher for women and for low-income individuals.",
    "Subject areas: Central banks, Inflation, Inflation targeting, Monetary policy, Prices, Public debt, Quasi-fiscal operations.",
    "Keywords appearing in the source text: Capital controls, capital outflows, financial crises, Global, household inflation expectation, increase inflation expectation, Inflation, inflation expectation, Inflation targeting, public debt level, Quasi-fiscal operations, sensitivity of inflation expectation.",
    "Information provision about public debt levels affects household inflation expectations; larger information surprises produce larger expectation adjustments.",
    "Trust in monetary authorities (central bank confidence) can mitigate the pass-through from public debt information to household inflation expectations.",
    "Heterogeneity in responses suggests distributional considerations: women and low-income individuals are more responsive to public debt information in forming inflation expectations.",
    "Perceptions linking high public debt to stagflationary outcomes imply that public debt communication and fiscal policy credibility can influence inflation beliefs beyond immediate fiscal mechanics.",
    "**Working Paper**"
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