(UM11-13) - Macroeconomic Conditions and Updating of Expectations by Older Americans
Purvi Sevak and Lucie Schmidt
Individual decisions about consumption, saving, and labor supply should be directly linked to subjective expectations about future events. While a rich literature has emerged that examines individuals’ subjective probability expectations, little work has documented how these expectations change over time. This project will use HRS data merged to data on stock prices, unemployment, house prices, and higher frequency macroeconomic indicators to estimate how individual expectations respond to fluctuations in the local and national macroeconomy.