Publication Type

Journal Article

Version

publishedVersion

Publication Date

5-2022

Abstract

Motivated by the evidence that households purchased better quality goods across time in Singapore, we use a survey experiment to study the relationship between consumption upgrading and households’ beliefs about inflation. We find that providing price information on better-quality products will lead to higher inflation expectations. The effects on inflation expectations are smaller when price information on both higher- and lower-quality products is made available, suggesting that product replacement increases inflation expectations. Additional tests show that our results are not driven by mixing price with quality or numeracy. Our findings highlight the relationship between product replacement, product variety, and inflation expectations.

Keywords

Inflation expectations, Consumption, upgrading, Product Replacement, Survey Experiment

Discipline

Finance and Financial Management

Research Areas

Finance

Publication

Journal of Monetary Economics

Volume

128

First Page

124

Last Page

138

ISSN

0304-3932

Identifier

10.1016/j.jmoneco.2022.04.003

Publisher

Elsevier: 24 months

Additional URL

https://doi.org/10.1016/j.jmoneco.2022.04.003

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