Bank of Italy paper examines expectations’ effects on spending
Researchers find inflation levels affect strength of income and intertemporal substitution effects
A working paper published by the Bank of Italy investigates whether Italian consumers’ beliefs about future price levels affect their willingness to buy cars.
In Spend today or spend tomorrow? The role of inflation expectations in consumer behaviour, Concetta Rondinelli and Roberta Zizza use data from the Bank of Italy’s survey on household income and wealth. This survey has been running since the 1960s, and asks Italian consumers about their expectations of future inflation, among other things
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