Using scanner data and product-level information, this paper documents the trend and the cyclicality of the processing level of market-purchased household food consumption over the period 2007 to 2020 in the United States. I identify a novel strategy, the processing effort, that households exploit to reduce the price of their basket. This strategy consists in altering their basket composition at business cycle frequencies to purchase less processed foods for which I uncover a lower price per unit. Several results emerge. First, the strategy is effective in reducing the price per unit of the household basket. Second, the strategy was used by households in both the Great and the Covid-19 recessions but varied in intensity across income groups consistently with the theory of the opportunity cost of time. Third, its nature allows to infer that home production is countercyclical which has implications for modelling the time allocation of households during economic downturns. Finally, I develop a tractable heterogeneous agent model (THANK) that reproduces the empirical evidence and reveals broader implications of the processing effort strategy including an amplification of the inflation reduction capacity of a monetary policy tightening.

This paper explores the link between news and household macroeconomic expectations. I investigate which news topics are linked to one-year ahead household unemployment, inflation, and economic situation expectations. I show that household expectations incorporate news information from a set of news topics reflecting the state of the economy, as well as from expectation-specific topics. I uncover that energy news, and especially oil news, matter specifically for inflation expectations. Furthermore, I document the geographical dispersion of regional news topic coverage and consider their separate effects on household expectations. I find evidence that households incorporate both regional and national news in their expectations, with news on local labor market conditions having a prominent role.

We study how inflation impacts the public’s trust in the ECB and show that inflation concern is important for understanding the link between inflation and central bank trust. Inflation is not a direct driver of trust but rather impacts trust in the central bank indirectly when it becomes a concern for survey respondents. This is only partly explained by inflation attention. Our results have several important implications for monetary policy. When inflation is high, heightened attention can result in a reinforcing spiral of high inflation and low trust, impeding effective monetary policy. Low levels of attention during low-inflation-episodes make it hard to communicate with the general public, and as such regain their trust or impact their inflation expectations in such a regime.

This paper explores the impact of media, public policy and regional income and population density heterogeneity on renewable energy crowdfunding campaigns. I examine the effects of media-coverage and geographical restrictions on the number of participants of successful crowdfunding campaigns and their duration. I find that the higher the media coverage, the larger the number of investors. I uncover that using a combination of social and traditional media attracts more investors than using a single outlet. I show that an unintended energy policy consequence of geographically restricted is that campaigns are longer and involve fewer investors.

Contrary to the Great and other past US Recessions, the reduction in services consumption exceeds the decline in nondurables consumption during the COVID-19 pandemic. We study the drivers of this unprecedented phenomenon through the lens of an estimated multi-sector Dynamic Stochastic General Equilibrium (DSGE) model that distinguishes between nondurables and services sectors. We find that economic uncertainty is once again important, but it does not generate sectoral heterogeneity. Demand-side factors reallocating consumption across sectors and proxying for voluntary and regulatory social distancing measures, as well as the lack of wage adjustments in services despite plummeting employment, became influential during the pandemic.