While many households know about inflation and its erosive effect on nominal assets, most are unaware of inflation’s erosive impacts on nominal debt. Once they receive information about debt erosion, households update their beliefs about their own real net wealth and even change their consumption choices.

German households living in areas with higher local inflation during the hyperinflation of the 1920s expect higher inflation today, suggesting that inflationary shocks have a long-lasting impact on attitudes toward inflation.

As inflation has recently risen in advanced economies, both households and firms have become more attentive and informed about inflation, leading them to respond less to information about inflation and monetary policy.

This work offers new insights into the effects of persistent fiscal deficits on US inflation, revealing that targeted income redistribution during COVID increased short-term inflation significantly. The largest sustainable primary deficit is 4.6% of GDP, or 40% higher than current levels, dependent on how deficit spending is distributed.

Monetary transmission is significantly larger for online banks; compared to brick-and-mortar banks, a 100-basis point increase in the federal funds rate leads to an approximately-30-basis-point larger increase in deposit rates offered by online banks.

Neither eligibility for nor information about the Teacher Loan Forgiveness (TLF) program affect teachers’ employment decisions. Information increases application and TLF receipt rates for teachers who have already accrued the five years required to be eligible. In general, teachers appear to value the prospect of debt relief, and TLF take-up may be constrained by program complexity and administrative barriers.

A combination of nudges and taxes always outperforms each policy in isolation; however, there is large variation in how much these combinations add to social welfare, reinforcing the importance of empirically quantifying welfare effects.

Relative to borrowers who had to continue paying their loans, borrowers allowed to pause their payments sharply increased mortgage, auto, and credit card borrowing, with little effect on loan delinquencies.