Handbook of US Consumer Economics

Chapter 10

Consumer expectations and the macroeconomy

Giorgio Topa     Research and Statistics, Federal Reserve Bank of New York, New York, NY, United States

Abstract

This Chapter provides an overview of the growing literature on eliciting and using subjective expectations data in economics. Expectations are a key component of any model of decision-making under uncertainty, and drive economic choices by agents in a broad variety of realms. They are also carefully monitored by practitioners, financial market participants, and policy-makers—for instance in the conduct of monetary policy. Economists have traditionally been reluctant to collect and use direct data on expectations. This has changed over the last three decades, with researchers increasingly ...