Discussion paper

DP16279 Macroeconomic Expectations and Credit Card Spending

How do macroeconomic expectations affect consumer decisions? We examine this question using an experiment with 2,872 credit card customers at a large commercial bank. We provide participants with expert forecasts of inflation and the nominal exchange rate and measure the consumption response to this information using detailed data on individual credit card transactions. We find that forecasts strongly affect inflation and exchange rate expectations, but do not change spending or self-reported consumption plans as predicted by standard models of intertemporal choice. Results from a supplementary survey experiment suggest that consumers are sophisticated enough to anticipate nominal rigidities that lower expected real income and reduce spending on durables for precautionary reasons, counteracting the effects predicted by standard models of intertemporal optimization. The absence of a link between consumer expectations and behavior has potentially important implications for macroeconomic policies such as forward guidance.


Kanz, M, R Perez-Truglia and M Galashin (2021), ‘DP16279 Macroeconomic Expectations and Credit Card Spending‘, CEPR Discussion Paper No. 16279. CEPR Press, Paris & London. https://cepr.org/publications/dp16279