Heterogeneity in Consumers' Economic Expectations across Euro Area Countries
Autor: Lena Dräger, Michal Marencak, Giang Nghiem, Maritta Paloviita
Nummer: 747, Jun 2026, pp. 79
JEL-Class: D30, D84, E31, E52
Abstract:
This paper examines cross-country differences in consumer expectations about macroeconomic outcomes and mortgage borrowing conditions within a monetary union. Using harmonized microdata from the ECB Consumer Expectations Survey for eleven euro area countries, we document significant national disparities. By sequentially adding a rich set of consumer- and country-specific macro controls to pooled regressions with country fixed effects, we find that these factors account for much, but not all, of the cross-country heterogeneity in expectations. These remaining differences likely reflect unobserved countryspecific factors, highlighting the need for country-tailored monetary policy communication to effectively stabilize consumer expectations.
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