The Unassuming Economist

From a paper by Haibo Li, Jiayin Sun, and Ningxin Qiu:

“Previous research shows that the impacts of inflation expectations on consumer behaviour are mixed. Using a survey of 2,500 Chinese households, this letter finds that rising inflation expectations increase the purchase intention of durable goods, such as housing and cars, while reducing the demand for easily substitutable goods, such as mobile phones. The effect exhibits significant heterogeneity across income and age groups: higher-income and younger consumers are more inclined to increase investment-oriented spending, while lower-income and older groups adopt more cautious consumption behaviours. These findings also highlight the heterogeneous effects of inflation expectations on consumer welfare across demographic characteristics.”