Noémi BERLIN  – Extreme macroeconomic risk, personal expectations and financial decisions: an information experiment on five European countries

Noémi Berlin is a CNRS (French National Center for Scientific Research) researcher affiliated with the University Paris Nanterre, EconomiX.  She is a behavioral economist with a particular interest in understanding the determinants of various health behaviors, such as eating and smoking habits, as well as exploring gender differences in educational and labor decisions. More generally, she is interested in understanding individuals’ risk perception. She has conducted lab and field experiments with different populations (e.g., children, pregnant smokers).

Abstract

To evaluate expectations of future extreme macroeconomic risks –‘macroeconomic disasters’ and ‘inflationary crises’–, and their relation to personal expectations and financial decisions, we conducted an online survey experiment on a large-scale sample of the population in five European countries: France, Germany, Italy, Spain and the UK in September 2023. Exploiting both a between and within-subject design, we provided half of the participants with information about past extreme macroeconomic events in Europe. Our findings indicate that households have high expectations of future extreme macroeconomic events in their own country, and that the causal effect of information provision on expectations varies greatly depending on the country and the type of extreme risk. Information provision about past events can thus play out in opposite directions; however, it always increases the probability of revising one’s expectations. We then find that expectations of extreme macroeconomic risks are causally transmitted to personal expectations about one’s future standard of living. However, small variations in expectations of extreme macroeconomic risk do not appear to independently drive changes in financial decisions, despite correlational evidence.

Interested ? Send an email to Marie Pelé (marie.pele@univ-catholille.fr)