Stock-driven Household Attention
Fuente:
arXiv
Gespeichert in:
| Hauptverfasser: | , |
|---|---|
| Format: | Preprint |
| Veröffentlicht: |
2024
|
| Schlagworte: | |
| Online-Zugang: | |
| Tags: |
Tag hinzufügen
Keine Tags, Fügen Sie den ersten Tag hinzu!
|
| _version_ | 1866909265313136640 |
|---|---|
| author | Ahn, Hie Joo Xie, Shihan |
| author_facet | Ahn, Hie Joo Xie, Shihan |
| contents | We investigate the effects of stockholding on households' attention to the macroeconomy. Households' attentiveness is measured by their accuracy of inflation expectations and perceptions. Relative to non-stockholders, stockholders produce more accurate inflation forecasts and backcasts, disagree less about future inflation, and adjust their outlook more responsively to news, suggesting that stock-market participation raises households' attention. Frequent changes in stock prices incentivize stockholders to closely monitor financial markets for optimal trading, given the low cost of acquiring information. Consequently, paying attention to the macroeconomy helps hedge the risks associated with holding stocks. Therefore, attention heterogeneity driven by stockholdings can be a channel through which the distributional consequences of monetary policy are created. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2407_16141 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Stock-driven Household Attention Ahn, Hie Joo Xie, Shihan General Economics Economics We investigate the effects of stockholding on households' attention to the macroeconomy. Households' attentiveness is measured by their accuracy of inflation expectations and perceptions. Relative to non-stockholders, stockholders produce more accurate inflation forecasts and backcasts, disagree less about future inflation, and adjust their outlook more responsively to news, suggesting that stock-market participation raises households' attention. Frequent changes in stock prices incentivize stockholders to closely monitor financial markets for optimal trading, given the low cost of acquiring information. Consequently, paying attention to the macroeconomy helps hedge the risks associated with holding stocks. Therefore, attention heterogeneity driven by stockholdings can be a channel through which the distributional consequences of monetary policy are created. |
| title | Stock-driven Household Attention |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2407.16141 |