FORWARD GUIDANCE AND HOUSEHOLD EXPECTATIONS

Last registered on February 07, 2020

Pre-Trial

Trial Information

General Information

Title
FORWARD GUIDANCE AND HOUSEHOLD EXPECTATIONS
RCT ID
AEARCTR-0005378
Initial registration date
January 31, 2020
Last updated
February 07, 2020, 3:52 PM EST

Locations

Region

Primary Investigator

Affiliation
University of California, Berkeley

Other Primary Investigator(s)

PI Affiliation
European Cental Bank
PI Affiliation
Chicago Booth
PI Affiliation
UT Austin

Additional Trial Information

Status
Completed
Start date
2019-01-01
End date
2019-11-01
Secondary IDs
Abstract
We compare the causal effects of forward guidance communication about future interest rates on households’ expectations of inflation, mortgage rates, and unemployment to the effects of communication about future inflation in a randomized controlled trial using more than 25,000 U.S. individuals. We elicit individuals’ expectations in the Nielsen Homescan panel and then provide 22 different forms of information regarding past, current and/or future inflation and interest rates. Information treatments about current and next year’s interest rates have a strong effect on household expectations but treatments beyond one year do not have any additional impact on forecasts. Exogenous variation in inflation expectations transmits into other expectations. The richness of our survey allows us to better understand how individuals form expectations about macroeconomic variables jointly and the non-response to long-run forward guidance is consistent with models in which agents have constrained capacity to collect and process information.
External Link(s)

Registration Citation

Citation
Coibion, Olivier et al. 2020. "FORWARD GUIDANCE AND HOUSEHOLD EXPECTATIONS ." AEA RCT Registry. February 07. https://doi.org/10.1257/rct.5378-1.0
Experimental Details

Interventions

Intervention(s)
Households were provided with information about:
1) interest rate projections of the Fed
2) information about current, past or future inflation
Intervention Start Date
2019-03-01
Intervention End Date
2019-05-31

Primary Outcomes

Primary Outcomes (end points)
inflation expectations
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
After respondents answered the initial set of questions in the first wave, they were assigned to one of 24 groups: a control group, one placebo treatment group, and 22 treatment groups. We designed the treatments to disentangle the effects of different possible types of forward guidance. We vary the target that is communicated: we not only communicate inflation forecasts or expected future policy rates but we also vary the length of the forecast horizon, the exact information of the forecast, central tendency, upper range, or lower range, or all jointly, as well as different combinations. Moreover, some survey participants only received information about current/past rates. The latter treatments allow us to study the extent to which individuals might have differential responses to backward-looking vs. forward-looking information. We also fielded a placebo treatment to differentiate true learning from spurious anchoring effects. Each group consists of approximately 1/24th of the total sample that received the survey and the treatments are randomly assigned.
Experimental Design Details
Randomization Method
computer
Randomization Unit
individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
no clusters
Sample size: planned number of observations
up to 50,000 households
Sample size (or number of clusters) by treatment arms
25,000 households participating in Nielsen Household panel
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials