Information and Wealth Heterogeneity in the Macroeconomy

Tobias Broer, Alexandre Kohlhas, Kurt Mitman, Kathrin Schlafmann

Research output: Working paperResearch


We document systematic differences in macroeconomic expectations across U.S. households and rationalize our findings with a theory of information choice. We embed this theory into an incomplete-markets model with aggregate risk. Our model is quantitatively consistent with the pattern of expectation heterogeneity in the data. Relative to a full-information counterpart, our model implies substantially increased macroeconomic volatility and inequality. We show through the example of a wealth tax that neglecting the information channel leads to erroneous conclusions about the effects of policies. While in the model without information choice a wealth tax reduces wealth inequality, in our framework it reduces information acquired in the economy, leading to increased volatility and higher wealth inequality in equilibrium.
Original languageEnglish
Place of PublicationLondon
PublisherCentre for Economic Policy Research
Number of pages33
Publication statusPublished - Mar 2021
SeriesCentre for Economic Policy Research. Discussion Papers


  • Heterogenous information
  • Unemployment
  • Incomplete markets
  • Precautionary savings

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