Macroeconomic Conditions and Updating of Expectations by Older Americans

TitleMacroeconomic Conditions and Updating of Expectations by Older Americans
Publication TypeReport
Year of Publication2011
AuthorsSevak, P, Schmidt, L
Series TitleMichigan Retirement Research Center Research Working Paper
Document NumberWP 2011-259
InstitutionThe University of Michigan, Michigan Retirement Research Center
CityAnn Arbor, MI
KeywordsConsumption and Savings, Employment and Labor Force, Expectations

Economic theory suggests that individual decisions about consumption, saving, and labor supply should be directly linked to subjective expectations about future events. This project uses panel data from the Health and Retirement Study from 1994-2008 merged to data on a number of local and high frequency macroeconomic indicators to estimate how individual expectations respond to fluctuations in the local and national macroeconomy. Our results suggest that individuals revise their expectations in response to both local and national macroeconomic fluctuations in ways that appear to make sense, and that this is stronger for respondents with higher levels of education.

Endnote Keywords

Consumption/savings/labor supply/subjective Expectations

Endnote ID


Citation Key5912