Mary A. Burke|Michael Manz
Economic Literacy and Inflation Expectations: Evidence from a Laboratory Experiment
Brandeis University|Federal Reserve Bank of Boston|Federal Reserve Bank of St. Louis|Brandeis University|Federal Reserve Bank of Boston|Federal Reserve Bank of St. Louis
present experimental evidence link economic literacy inflation forecast accuracy experiment investigates two channels economic literacy may enable better forecasts choice information ii use information literate subjects choose relevant information use given information effectively starting 10th percentile score boost literacy taking economics course predicts 064 standard deviation decline mean absolute forecasting error findings suggest significant portion demographic heterogeneity inflation expectationsobserved survey datamay driven heterogeneity economic literacy