Expectations Matter: The New Causal Macroeconomics of Surveys and Experiments

What people believe about the economy—and why it matters

How do expectations about the future influence economic behavior? For decades, economists have known that beliefs play a central role—from how much households spend, to how firms set prices, to how central banks design policy. But figuring out exactly how expectations affect decisions has been one of the field’s most persistent empirical challenges.

In this book, Olivier Coibion and Yuriy Gorodnichenko present a fresh empirical approach...