Consumer Expectations: Micro Foundations and Macro Impact
Richard Curtin has directed the University of Michigan'sconsumer sentiment surveys for more than four decades. His analysesof recent trends in consumer expectations are regularly covered inthe worldwide press. In this book, Curtin presents a new theory ofexpectations. Whereas conventional theories presume that consumersplay a passive role in the macro economy, simply reacting tocurrent trends in incomes, prices, and interest rates, Curtinproposes a new empirically consistent theory. He argues thatexpectations are formed by an automatic process that utilizesconscious and nonconscious processes, passion and reason,information from public and private sources, and social networks.Consumers ultimately reach a decision that serves both the microdecision needs of individuals and reflects the common influence ofthe macro environment. Drawing on empirical observations, Curtinnot only demonstrates the importance of consumer sentiment, butalso how it can foreshadow the cyclical turning points in theeconomy.