🚨 New paper! 🚨
w/ @ph_schirmer @JoWohlfart

Stock markets revolve around return expectations, which traders form in light of their deeper understanding – their mental model – of the market ...

... which we know very little about. Time to change this!

drive.google.com/file/d/1-_VPOR…
We study and compare the views of

1️⃣ US general population
2️⃣ US retail investors
3️⃣ US financial professionals (who advise and trade for households and institutions)
4️⃣ academic experts

How important are economic narratives?

Short story: Very important! Narratives affect how people interpret economic news and forecast the future.

Our new WP studies the stories people tell about the rise in inflation.
drive.google.com/file/d/1-2eP--…
w/ @cp_roth @JoWohlfart @Ingar30

🧵 First things first. We need a working definition of narratives and a tailored measurement approach. Here we go!

Step 1: We consider a narrative as a causal account for why an event (here: the 2021/22 rise of inflation) occurred.

Here's a question that always puzzled me.

We don't want to judge others by their *circumstances* (parents, gender, race). But do we hold them responsible for their *choices* even when these choices are strongly shaped by circumstances?

Yes, we do, 100%, my new WP suggests.

🧵 Meritocracy & responsibility are two defining ideas of our Western culture. We aspire to reward effort and hard work, hold others responsible for laziness, but promise not to judge individuals by the circumstances they were born into.