Households’ Ability to Adjust Spending and Attention to the Central Bank

Speaker: Hibiki Ichiue

Affiliation: Keio University

Location: Room 103 - Chamberlain Building (#35), UQ St Lucia Campus.

Online via Zoom: https://uqz.zoom.us/j/82603079317 

Abstract

Central bank communication is regarded as a potential tool to guide households' inflation expectations, which in turn influence their spending through the intertemporal substitution channel. Based on our theoretical model, we hypothesize that lower-income households are less attentive to information about future inflation, including information from the central bank, since they are less able to adjust spending and thus benefit less from such information. Empirical analysis based on datasets of Japanese household surveys, which include questions about the Bank of Japan, is consistent with this hypothesis. Our result suggests that central bank communication should focus more on those with a greater ability to adjust spending.

About the presenter's meeting

If you would like to meet with Prof Ichiue, please contact Dr Satoshi Tanaka