D’Acunto, Francesco. <br/><br/>
Managing Households' Expectations with Unconventional Policies / 
Francesco D’Acunto, Daniel Hoang, Michael Weber. 
 - Cambridge, Mass.  National Bureau of Economic Research  2020. 
 - 1 online resource:  illustrations (black and white); 
 - NBER working paper series  no. w27399 .
 - Working Paper Series (National Bureau of Economic Research)  no. w27399. .
<br/><br/> June 2020. 
<br/><br/> With a binding effective lower bound on interest rates and large government deficits, conventional policies are unviable and policymakers resort to unconventional policies, which target households' expectations directly. Using unique micro data and a difference-in-differences strategy, we assess the effectiveness of unconventional fiscal policy and forward guidance, both of which aim to stimulate consumption via raising households' inflation expectations. All households' inflation expectations and spending plans react to unconventional fiscal policy. Instead, households, contrary to experts, do not react to forward guidance. We argue that policies aiming to affect households directly are ineffective if (non-expert) households do not understand them. 
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