Inflation, Exchange Rate and Interest Rate Expectations of Firms: Evidence from a Randomized Control Trial

This paper studies how firms update their macroeconomic expectations when they receive information about the forecasts of professional forecasters. We conduct a randomized controlled trial in which firms are provided with publicly available information on professionals’ expectations for inflation, the exchange rate, and interest rates. Although this information is already available in the public domain, firms respond strongly to it: all three information treatments generate significant revisions in firms’ own expectations. The results show that firms learn from professional forecasts even when the information is not private, pointing to the importance of information frictions and limited attention in expectation formation. We further document substantial pass-through across expectations, as changes in one dimension of beliefs spill over to others. Beyond expectation updating, the experimentally induced belief shifts also affect firms’ planned and actual decisions, highlighting the economic relevance of expectation management. Overall, the findings provide causal evidence that publicly available macroeconomic forecasts can meaningfully shape firms’ beliefs and behavior.