Expectations and the business cycle

Main Research Area:
Economics
Research Area:
Business Cycle and Growth
Responsible:
Dr. Martin Geiger

How does the general public interpret macroeconomic developments? As expectations influence economic decisions and thus savings, consumption and investment behaviour, the interpretation of macroeconomic developments affects the propagation of economic shocks. Using survey data, we study how expectations react to different economic shocks.

 

The focus is currently on the research project “The State-Dependent Effects of Monetary and Fiscal Policy on Expectations”, which is funded by the Austrian National Bank and is being conducted by Martin Geiger (Liechtenstein Institute) together with Johann Scharler (University of Innsbruck) and Marios Zachariadis (University of Cyprus). In this project, the effects of monetary and fiscal policy on expectations are empirically investigated. Of particular interest is the influence of government debt on the expected effects of these economic policy shocks. Both monetary and fiscal policy affect public debt and its financing, especially when public debt is already high. If the population anticipates this, the effects of fiscal and monetary policy on expectations will vary according to the level of existing debt.

 

In addition, also other aspects of expectation formation of consumers as well as economic experts in reaction to macroeconomic developments are scrutinized in several other research projects.

 

Project start: 2019

From the publication database of the Liechtenstein Institute
Geiger, Martin; Güntner, Jochen (2024): The chronology of Brexit and UK monetary policy. Journal of Monetary Economics, 142.
Breitenlechner, Max; Geiger, Martin; Scharler, Johann (2023): Monetary policy announcements, consumers’ inflation expectations, and readiness to spend. Macroeconomic Dynamics, pp. 1-22.
Geiger, Martin; Eminidou, Snezana; Zachariadis, Marios (2023): Public Debt and state-dependent Effects of Fiscal Policy in the Euro Area, Journal of International Money and Finance, 130.
Geiger, Martin; Gründler, Daniel; Scharler, Johann (2023): Monetary policy shocks and consumer expectations in the euro area, Journal of International Economics, 140.
Geiger, Martin; Zachariadis, Marios (2022): Consumers’ updating, policy shocks and public debt: An empirical assessment of state dependencies. Macroeconomic Dynamics, 26(8).
Geiger, Martin; Scharler, Johann (2021): How do people interpret macroeconomic shocks? Evidence from U.S. survey data. Journal of Money, Credit, and Banking, 53(4), pp. 813-843.
Geiger, Martin; Zachariadis, Marios (2021): Consumers’ updating, policy shocks and public debt: An empirical assessment of state dependencies. Bendern (Arbeitspapiere Liechtenstein-Institut, 69).
Geiger, M.; Scharler, J. (2019): "How do consumers assess the macroeconomic effects of oil price fluctuations? Evidence from U.S. survey data". Journal of Macroeconomics (62).
Geiger, Martin (2019): Erwartungen haben Konjunktur. Gastkommentar. Wirtschaft Regional, 25.5.2019.