Research

Subjective Models of the Macroeconomy: Evidence From Experts and Representative Samples | with Carlo Pizzinelli, Chris Roth, and Johannes Wohlfart | Review of Economic Studies, 2022, Volume 89, Issue 6, Pages 2958–2991

Coverage: New York Times, Finance & Development

Short summary: We study people's subjective models of the macroeconomy and shed light on their attentional foundations. To do so, we measure beliefs about the effects of macroeconomic shocks on unemployment and inflation. Within samples of both 6,500 US households and 1,500 experts, beliefs are widely dispersed, even about the directional effects of shocks, and there are large differences in average beliefs between households and experts. Part of this disagreement arises from selective retrieval of different propagation channels of macroeconomic shocks.

Narratives about the Macroeconomy | with Ingar Haaland, Chris Roth, and Johannes Wohlfart | Revise & Resubmit, Review of Economic Studies

Coverage: VoxEU, FAS (German), SPIEGEL [1] (German), SPIEGEL [2] (German), Twitter thread
Superseding an earlier version with the title "Inflation Narratives".

Short summary: We provide evidence on narratives about the macroeconomy—the stories people tell to explain macroeconomic phenomena—in the context of a historic surge in inflation. We measure narratives about the rise in inflation in open-ended survey responses and represent them as Directed Acyclic Graphs. Our approach allows us to characterize laypeople's economic narratives. In a series of experiments, we show that narratives about the past shape how people forecast the future and how they interpret new information.

Shallow Meritocracy | Revise & Resubmit, Review of Economic Studies

Winner of the Distinguished CESifo Affiliate Award in Behavioral Economics 2022
Coverage: Twitter thread

Short summary: Meritocracies aspire to reward hard work but promise not to judge individuals by the circumstances into which they were born. However, circumstances often shape the choice to work hard. I show that people's merit judgments are insensitive to this effect. They hold others responsible for their choices, even if these choices have been shaped by unequal circumstances. In an experiment, US participants judge how much money workers deserve for the effort they exert. Unequal circumstances disadvantage some workers and discourage them from working hard. Nonetheless, participants reward the effort of disadvantaged and advantaged workers identically, regardless of the circumstances under which choices are made.

What's Worth Knowing? Economists' Opinions about Economics | with Armin Falk

Coverage: VoxEU, LSE Impact blog, Ökonomenstimme (German), atlantico (French), briq news room

Short summary: In global surveys with more than 10,000 economists, we study economists’ views about what is worth knowing. We document a coordination failure, i.e., a discrepancy between what economists consider to be worth knowing and the research they actually produce. Relative to the status quo, most economists believe that economics should become more policy-relevant, multidisciplinary, disruptive, and pursue more diverse research topics. However, economists strongly underestimate how many of their colleagues endorse these views.

Misperceived Social Norms and Willingness to Act Against Climate Change | with Teodora Boneva, Felix Chopra, and Armin Falk

IZA Award for Innovative Research on the Economics of Climate Change
Coverage: Ökonomenstimme (German), briq news room (German), ZEIT (German)
Superseding an earlier version with the title "Fighting Climate Change: The Role of Norms, Preferences, and Moral Values".

Short summary: We document the individual willingness to act against climate change and study its behavioral determinants in a large representative sample of US adults. We document systematic misperceptions of social norms. Respondents vastly underestimate the prevalence of climate-friendly behaviors and norms among their fellow citizens. Correcting these misperceptions in an experiment causally raises the individual willingness to act against climate change as well as individual support for climate policies.