Tell Me Something I Don't Already Know: Learning in Low‐ and High‐Inflation Settings
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Weber, Michael
Candia, Bernardo
Afrouzi, Hassan
Ropele, Tiziano
Lluberas, Rodrigo
Frache, Serafin
Meyer, Brent
Kumar, Saten
Gorodnichenko, Yuriy
Georgarakos, Dimitris
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The Econometric Society
Abstract
Using randomized control trials (RCTs) applied over time in different countries, we study whether the economic environment affects how agents learn from new information. We show that as inflation rose in advanced economies, both households and firms became more attentive and informed about publicly available news about inflation, leading them to respond less to exogenously provided information about inflation and monetary policy. We also study the effects of RCTs in countries where inflation has been consistently high (Uruguay) and low (New Zealand) as well as what happens when the same agents are repeatedly provided information in both low‐ and high‐inflation environments (Italy). Our results broadly support models in which inattention is an endogenous outcome that depends on the economic environment.
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1401 Economic Theory, 1402 Applied Economics, 1403 Econometrics, Econometrics, 3801 Applied economics, 3802 Econometrics, 3803 Economic theory
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Econometrica, ISSN: 0012-9682 (Print), The Econometric Society, 93(1), 229-264. doi: 10.3982/ecta22764
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© 2025 The Authors. Econometrica published by John Wiley & Sons Ltd on behalf of The Econometric Society. Yuriy Gorodnichenko is the corresponding author on this paper. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made
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Except where otherwise noted, this item's license is described as © 2025 The Authors. Econometrica published by John Wiley & Sons Ltd on behalf of The Econometric Society. Yuriy Gorodnichenko is the corresponding author on this paper. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made