Paula Patzelt

Working papers

Estimating the rise in expected inflation from higher energy prices (with Ricardo Reis) 

Current draft; CEPR discussion paper; Presentation video

When the price of electricity increases by 1%, households’ average expected inflation increases by 0.9 to 1.3 basis points. But, if those expectations have become unanchored, as happened between the start of 2021 and 2023, then the effect is higher by 0.2 to 0.7 basis points. This paper arrives at these estimates by exploiting variation both in the time series, and especially in the cross section, from newly-available public data on expected inflation by Euro area households across region, gender, education, and income, and on the cost of energy across region and source. The impact of exogenous shocks to energy prices on expected inflation increases for 8 to 12 months, but they can only account for a small share of the rise in expected inflation in 2021-23.

Publications

Household disagreement about expected inflation (with Salomé Fofana and Ricardo Reis)

In Research Handbook of Inflation, edited by Guido Ascari and Riccardo Trezzi, Edward-Elgar Publishing, chapter 15, forthcoming, 2024.

Current draft; CEPR discussion paper

We survey the main facts that have emerged from research on disagreement between households on what they expect inflation to be. We document them using figures and correlations that capture: the statistical regularities on the observable drivers of disagreement, the measurement of residual disagreement, the usefulness of disagreement to forecast inflation, the response of disagreement to shocks, the disagreement between households and professionals, and the relation between disagreement, risk, and uncertainty.

Work in progress

• Exogenous shocks to energy prices from renewable electricity sources

• Individual credit risk spillovers through financial networks

Teaching

• LSE: EC1B1 - Macroeconomics I (2023, 2024)

• LSE: EC2A5 - Microeconomics II (2022, 2023)

• LMU: Macroeconomics II (2019)