This article investigates the importance of both trust and sociability for stock market participation differences in stockholding across Europe. We estimate significant effects two, find that can partly balance discouragement effect on induced by low regional prevailing trust. test exogeneity indicators using variation history political institutions frequency contacts with grandchildren, respectively. Moreover, is stronger countries limited average trust, offering an explanation remarkably...

We implement a survey of Dutch households in which random subsets respondents receive information about inflation. The resulting exogenously generated variation inflation expectations is used to assess how affect consumption decisions. causal effects reduced on nondurable spending are imprecisely estimated, but there sharp positive effect durable spending. This likely driven by the fact that seem become more optimistic their real income and aggregate when they decrease expectations. find...

We use randomized treatments that provide different types of information about the first and/or second moments future economic growth to generate exogenous changes in perceived macroeconomic uncertainty treated households. The effects on their spending decisions relative an untreated control group are measured follow-up surveys. Our results indicate that, after taking into account moments, higher induces households significantly and persistently reduce total monthly subsequent months....

Abstract We compare causal effects of forward guidance about future interest rates on households’ expectations inflation and nominal mortgage to the communication in a randomized control trial using more than 20,000 U.S. consumers Nielsen Homescan Panel. elicit consumers’ expectations, then provide 22 different forms information regarding past, current, and/or inflation. Information treatments current or all have similar offsetting rate yielding limited pass-through into perceived real...

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 advanced economies, both households and firms became more attentive informed about publicly available news inflation, leading them to respond less exogenously provided information monetary policy. also effects of RCTs countries where has been consistently high (Uruguay) low (New Zealand) well...

Can concern with relative standing, which has been shown to influence consumption and labor supply, also increase borrowing the likelihood of financial distress? We find that perceived peer income contributes debt distress among those who consider themselves poorer than their peers. use unique responses describing characteristics from a Dutch population-wide survey handle two major challenges uncovering social interaction effects on borrowing: (1) debts, unlike conspicuous consumption, are...

This paper uses population‐wide data from the Panel Study of Income Dynamics and Survey Consumer Finances to resolve conflict between overtrading inactivity shown in administrative on brokerage retirement accounts, respectively. Considerable inertia is found linked characteristics (e.g., limited education or resources), but less index movements: downswing has encouraged staying out, rather than getting market. The small minority with accounts exhibits important differences trading patterns...

We use cross-country microdata and counterfactual methods to document international differences in ownership holdings of stocks, private businesses, homes, mortgages among older households thirteen countries. decompose these into two parts, related population characteristics economic environments. Shortly prior the recent financial crisis, U.S. tended invest more stocks less homes have larger than Europeans similar characteristics. Differences amounts are primarily linked environments that...

Savings accounts are owned by most households, but little is known about the performance of households' investments. We create a unique dataset matching information on individual savings from DNB Household Survey with market data account-specific interest rates and characteristics. document heterogeneity in returns across which can be partly explained financial sophistication. A one-standard deviation increase literacy associated 12% compared to median rate. isolate usage modern technology...

This paper considers how monetary policy produces heterogeneous effects on euro area households, depending the composition of their income and components wealth. We first review existing evidence affects wealth inequality. then illustrate quantitatively various channels transmission—net interest rate exposure, intertemporal substitution indirect channels—affect individual households. find that channel has an overwhelming importance, especially for households holding few or no liquid assets....

Abstract We use the responses of a representative sample Dutch households to survey questions that ask how much their consumption would change in response unexpected, transitory income shocks (positive or negative). The questionnaire also distinguishes between relatively small changes (a one-month increase drop income), and larger ones (equal three-months' income). results are broadly line with models intertemporal choice precautionary saving, borrowing constraints finite horizons.

Using randomized control trials (RCTs) applied over time in different countries, we study how the economic environment affects agents learn from new information. We show that as inflation has recently risen advanced economies, both households and firms have become more attentive informed about inflation, leading them to respond less exogenously provided information monetary policy. also effects of RCTs countries where been consistently high (Uruguay) low (New Zealand) well what happens when...

We introduce professional financial advice in households' choice to hold risky assets. Depending on their perceived own capability, it is either trust or perception of consumer protection that affects more willingness assets such as stocks. present evidence consistent with these predictions. Our empirical analysis also highlights economically significant differences rights consumers services, even when they face similar legal conditions.

We implement a survey of Dutch households in which random subsets respondents receive information about inflation.The resulting exogenously generated variation inflation expectations is used to assess how affect subsequent monthly consumption decisions relative those control group.The causal effects elevated on nondurable spending are imprecisely estimated but there sharp negative effect durable spending.We provide evidence that this likely driven by the fact seem become more pessimistic...

We compare the causal effects of forward guidance communication about future interest rates on households' expectations inflation, mortgage rates, and unemployment to inflation in a randomized controlled trial using more than 25,000 U.S. individuals Nielsen Homescan panel.We elicit individuals' then provide 22 different forms information regarding past, current and/or rates.Information treatments next year's have strong effect household but beyond one year do not any additional impact...

This paper discusses the recent wave of research that has emphasized importance measures consumers' inflation expectations. In contrast to other expected inflation, such as for experts or financial market participants, expectations capture broader distribution societal beliefs about inflation. revealed very significant deviations from traditional assumptions rationality in formation. However, households do act on their though heterogeneous ways can depart predictions conventional economic...

Using survey data from a representative sample of Dutch households, we estimate the strength precautionary saving by eliciting subjective expectations on future consumption. Expected consumption risk is positively correlated with self-employment and income negatively age. We insert these (rather than realizations, as in existing literature) an Euler equation for degree prudence associating expected growth. Robust OLS IV estimates indicate coefficient relative around 2. obtain similar results...