Monetary policy transmission to households: The importance of consumers’ attention to interest rates and financial literacy

Inflatie

Differences in the attention that households pay to economic news may offer important insights for the business cycle and the propagation of economic shocks. This column uses responses from the ECB’s Consumer Expectations Survey to show that in a high-inflation, high-interest-rate environment, consumers pay much more attention to price developments than to interest rates. The authors also find evidence of varying levels of attention to interest rates across consumers, with holders of adjustable-

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