Template-Type: ReDIF-Paper 1.0
Author-Name: Fiorella De Fiore
Author-X-Name-First: Fiorella
Author-X-Name-Last: De Fiore
Author-Name: Marco Jacopo Lombardi
Author-X-Name-First: Marco Jacopo
Author-X-Name-Last: Lombardi
Author-Name: Albert Pierres Tejada
Author-X-Name-First: Albert Pierres
Author-X-Name-Last: Tejada
Title: Fiscal stimulus plans and households' expectations
Abstract: Fiscal decisions develop through multiple stages of political discussions and lengthy legislative processes. We propose a measure of public attention to fiscal policy news based on Google Trends and investigate the reaction of households' expectations when attention is highest. We focus on three large U.S. fiscal stimulus plans: the CARES Act, the American Rescue Plan, and the Tax Cuts and Jobs Act. We find that attention peaks when the plan is approved by Congress or signed by the President. On those dates, financially literate households significantly adjust their expectations: those of inflation and earnings increase, while those of unemployment decline.
Creation-Date: 2024-12
File-URL: https://www.bis.org/publ/work1238.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work1238.htm
File-Format: text/html
Number: 1238
Keywords: inflation expectations, fiscal policy, stimulus plans, households
Classification-JEL: E30, E40, E50, E70
Handle: RePEc:bis:biswps:1238