We document and evaluate how businesses are reacting to the COVID-19 crisis through August 2020. First, on net, firms see the shock (thus far) largely as a demand rather than supply shock. A greater ...share of firms report significant or severe disruptions to sales activity than to supply chains. We compare these measures of disruption to their expected changes in selling prices and find that, even for firms that report supply chain disruptions, they expect to lower near-term selling prices on average. We also show that firms are engaging in wage cuts and expect to trim wages further before the end of 2020. These cuts stem from firms that have been disproportionally negatively impacted by the pandemic. Second, firms (like professional forecasters) have responded to the COVID-19 pandemic by lowering their one-year-ahead inflation expectations. These responses stand in stark contrast to that of household inflation expectations (as measured by the University of Michigan or the New York Fed). Indeed, firms’ one-year-ahead inflation expectations fell precipitously (to a series low) following the onset of the pandemic, while household measures of inflation expectations jumped markedly. Third, despite the dramatic decline in firms’ near-term inflation expectations, their longer-run inflation expectations have remained relatively stable.
It is important to understand the relative importance of business ethics and social responsibility in determining brand attitudes. However, there has been a failure in prior research to differentiate ...between attitudes toward business ethics and CSR. This research reviews customer-brand research related to business ethics and social responsibility and conducts a study to evaluate customer attitudes. Four scenarios offer variations in company behaviors related to positive and negative conduct of customer social responsibility and business ethics. Study findings from a panel of 351 respondents provide new insights related to a customer's expectations and perceptions of company CSR and business ethics behavior. We conclude that although CSR attitudes remain important, customers value business ethics as a critical behavior in their perceptions of brand attitudes.
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Households’ and firms’ subjective inflation expectations play a central role in macroeconomic and intertemporal microeconomic models. We discuss how subjective inflation expectations are measured, ...the patterns they display, their determinants, and how they shape households’ and firms’ economic choices in the data and help us make sense of the observed heterogeneous reactions to business-cycle shocks and policy interventions. We conclude by highlighting the relevant open questions and why tackling them is important for academic research and policymaking.
Owing to the outbreak of the COVID-19 pandemic and the rapid increase in the number of international higher education students, online academic programmes have become more centralised and became the ...main, sometimes only, form of education. Although the online environment offers flexible access to education, it can cause concerns and difficulties for both international students and the host universities as they may not be well informed of each other's expectations. This can make transition extremely challenging and a major cause of anxiety for international students. Thus, this study conceptually discusses the gaps between the expectations held by lecturers in host universities and their international students about the extent of self-navigated online learning. In the current forms of course coordination, international students may have both frustration and cognitive overloads due to the many challenges associated with studying in a foreign university. It is recommended, therefore, for universities to provide better support for newly arrived international students in terms of helping them navigate online learning requirements in the initial stages, while encouraging the students to take greater responsibility for self-navigating their own online learning.
Survey evidence suggests that many investors form beliefs about future stock market returns by extrapolating past returns. Such beliefs are hard to reconcile with existing models of the aggregate ...stock market. We study a consumption-based asset pricing model in which some investors form beliefs about future price changes in the stock market by extrapolating past price changes, while other investors hold fully rational beliefs. We find that the model captures many features of actual prices and returns; importantly, however, it is also consistent with the survey evidence on investor expectations.
•Textual news data and machine learning methods are used to analyze expectations.•News media coverage predicts households’ inflation expectations.•State-dependent information rigidity among ...households is explained by the news.•Study highlights media’s important (independent) role in the expectation formation process.
Using a large news corpus and machine learning algorithms we investigate the role played by the media in the expectations formation process of households, and conclude that the news topics media report on are good predictors of both inflation and inflation expectations. In turn, in a noisy information model, augmented with a simple media channel, we document that the time series features of relevant topics help explain time-varying information rigidity among households. As such, we provide a novel estimate of state-dependent information rigidities and present new evidence highlighting the role of the media in understanding inflation expectations and information rigidities.
In this article, we address the relationship between teacher expectation bias and student characteristics, its effect on long-term student performance, and the development of this effect over time.
...Expectation bias
was defined as the difference between observed and predicted teacher expectation. These predicted expectations were estimated from a multilevel model in which teacher expectations of students' future performance in secondary education were regressed on students' prior achievement, IQ, and achievement motivation. Multilevel analyses were performed on a data set of about 11,000 students who entered secondary school in 1999 and who were monitored for 5 years. We found relationships between teacher expectation bias and student characteristics as well as a clear effect of expectation bias on long-term student performance. Teacher expectation bias partly mediated the effects of student characteristics on students' performance. Moreover, its effect was moderated by some of these characteristics. Mediation and moderation effects were the strongest for parents' aspirations. The effects of teacher expectation bias dissipated partly during the first 2 years but afterwards remained stable over time.
Patients and therapists possess psychotherapy-related expectations, such as their forecast of what processes will promote improvement. Yet, there remains limited research on such
, including their ...independent and dyadic associations with psychotherapy outcome. In this study, we explored the predictive influence of participants' change process expectations, and their level of congruence, on therapeutic outcomes.
Patients (
= 75) and therapists (
= 17) rated their change process expectations at baseline, and patients rated their psychological distress at baseline and three months into treatment.
Multilevel models indicated that patients' expectations for therapy to work through sharing sensitive contents openly and securely were positively related to subsequent improvement (
= -1.097;
= .007). On the other hand, patients' expectations for therapy to work through the exploration of unexpressed contents were negatively related to improvement (
= 1.388;
= .049). When patients rated the sharing of sensitive contents openly and securely higher than their therapists, they reported better outcomes (
= -16.528;
= .035).
These findings suggest that patients' expectations produce diverse effects during early stages of treatment, and that patients' belief in their ability to share sensitive contents may constitute a potential target to improve therapy effectiveness.
Previous work with survey data on inflationary expectations casts doubt on the Rational Expectations Hypothesis. In this paper, we develop a model of expectation formation where agents form their ...forecasts of inflation by selecting a predictor function from a set of costly alternatives whereby they may rationally choose a method other than the most accurate. We use this model to test whether survey data exhibit rationally heterogeneous expectations. Maximum likelihood is applied to a new discrete choice setting where the observed variable is continuous and the latent variable is discrete. The results show there is dynamic switching that depends on the relative mean squared errors of the predictors.
The aim of this paper is twofold. Firstly, we test the rationality of survey‐based and market‐based inflation expectations. Secondly, we investigate whether they indicate a different performance of ...the central bank in anchoring inflation expectations. Briefly, this paper verifies if inflation expectations' proxies display the same features regarding rationality and anchoring. Using data from the Brazilian market, we present robust evidence that both survey‐based and market‐based inflation expectations have useful content to explain realized inflation. Moreover, we find that these proxies of inflation expectations provide different assessments of the central bank's ability to anchor inflation expectations. The findings point out that central banks must monitor both survey‐based and market‐based inflation expectations to improve their monetary policy conduct.
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