Template-Type: ReDIF-Paper 1.0 Author-Name: Peter Andre Author-Name-First: Peter Author-Name-Last: Andre Author-Email: p.andre@uni-bonn.de Author-Workplace-Name: University of Bonn Author-Name: Carlo Pizzinelli Author-Name-First: Carlo Author-Name-Last: Pizzinelli Author-Email: cpizzinelli@imf.org Author-Workplace-Name: IMF Author-Name: Christopher Roth Author-Name-First: Christopher Author-Name-Last: Roth Author-Email: roth@wiso.uni-koeln.de Author-Workplace-Name: University of Cologne, ECONtribute Author-Name: Johannes Wohlfart Author-Name-First: Johannes Author-Name-Last: Wohlfart Author-Email: johannes.wohlfart@econ.ku.dk Author-Workplace-Name: Department of Economics, University of Copenhagen, CEBI, CESifo, Danish Finance Institute Title: Subjective Models of the Macroeconomy: Evidence From Experts and Representative Samples Abstract: We study people’s subjective models of the macroeconomy and shed light on their at-tentional foundations. To do so, we measure beliefs about the effects of macroeconomic shocks on unemployment and inflation, providing respondents with identical information about the parameters of the shocks and previous realizations of macroeconomic vari-ables. Within samples of both 6,500 US households and 1,500 experts, beliefs are widely dispersed, even about the directional effects of shocks, and there are large differences in average beliefs between households and experts. Part of this disagreement seems to arise from selective retrieval of different propagation channels of macroeconomic shocks. We confirm this mechanism causally by exogenously shifting households’ attention to ei-ther supply-side or demand-side channels. Moreover, households with different personal experiences recall different propagation channels of the shocks, while experts tend to re-call textbook models. Our findings offer a new perspective on the widely documented disagreement in macroeconomic expectations. Length: 150 pages Classification-JEL: D83, D84, E31, E52, E71 Keywords: Expectation Formation, Subjective Models, Associations, Thoughts, Attention, Experiences, Macroeconomic Shocks, Monetary Policy, Fiscal Policy. Creation-Date: 2021-10 File-URL: https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_119_2021.pdf File-Format: Application/pdf File-Function: First version, 2021 Number: 119 Handle: RePEc:ajk:ajkdps:119