Households’ Macroeconomic Beliefs: The Role of Education
The DEMS Economics Seminar series is proud to host
Alessia Russo (Università di Padova)
joint work with Castelnuovo E., Piccolo J., and Granziera E.
ABSTRACT: We study how education shapes households’ beliefs about the macroeconomy, focusing on the perceived relationships among inflation, unemployment, and interest rates. Highly educated individuals hold views consistent with a monetary policy trade-off and closer to those of professional forecasters, whereas less-educated individuals tend to adopt supply-side narratives not supported by expert consensus. In vignette-based policy scenarios, the highly educated update beliefs and report consumption–saving responses consistent with standard macroeconomic models. By contrast, less-educated respondents often fail to revise their beliefs or interpret the shock through non-standard, hard-to-rationalize frameworks. We explore several potential channels — economic exposure, information sources, institutional trust, cognitive ability, domain-specific knowledge, and financial literacy — and find that education is strongly correlated with each. However, the education gradient in macroeconomic reasoning persists even after accounting for these factors, suggesting that education itself plays a foundational role in shaping how people mentally structure the macroeconomy. Our findings highlight the importance of education for understanding belief heterogeneity and for designing more effective policy communication.
The seminar will be in presence, Room: 4096 - Building U7