Inflation Literacy, Inflation Expectations, and Trust in the Central Bank: A Survey Experiment

Abstract This paper explores the causal effects of inflation literacy using a two-step randomized controlled trial. The first step shows that qualitative information about inflation and monetary policy (Literacy treatment) enhances knowledge about these issues and raises both the likelihood of providing inflation predictions and trust in the central bank. The second step tests the joint impact of the Literacy treatment and further quantitative treatments. While the level of posterior expectations is affected only by quantitative information, inflation forecast uncertainty and trust react to both qualitative and quantitative information. Moreover, different information types may interact when impacting forecast uncertainty and trust.