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<p>We examine how information about GDP affects macroeconomic dynamics through the behavior of consumers and investors. To this end, we formulate a stylized macroeconomic simulation model in which agents respond to publicly available information about GDP growth. Their optimism or pessimism is driven by the discrepancy between observed and desired GDP growth while responses are boundedly rational in the sense that they exhibit anchoring bias regarding GDP growth expectations. GDP information affects agent choices regarding the allocation of income between consumption and savings, and indirectly regarding investment in productive capital versus R&amp;D aimed at improving labor productivity. By embedding a business cycle into the model, we examine whether informational feedback loops can amplify economic fluctuations and affect long-term growth. The results indicate that behavioral responses to GDP information may generate asymmetric consumption patterns over the cycle and influence long-run growth. While simplified, the framework offers first insights into how a widely publicized economic indicator like the GDP can shape aggregate dynamics through belief-driven behavior. Our results suggest that current macroeconomic modeling and policy analysis might be biased as they neglect this behavioral impact of GDP.</p>

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Impact of GDP-anchoring bias on macroeconomic dynamics through consumer and investment behaviour

  • 期刊论文

  • 发表日期：

    2025年12月3日

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  • Jeroen van den Bergh,
  • George Papachristos,
  • Ivan Savin

摘要

We examine how information about GDP affects macroeconomic dynamics through the behavior of consumers and investors. To this end, we formulate a stylized macroeconomic simulation model in which agents respond to publicly available information about GDP growth. Their optimism or pessimism is driven by the discrepancy between observed and desired GDP growth while responses are boundedly rational in the sense that they exhibit anchoring bias regarding GDP growth expectations. GDP information affects agent choices regarding the allocation of income between consumption and savings, and indirectly regarding investment in productive capital versus R&D aimed at improving labor productivity. By embedding a business cycle into the model, we examine whether informational feedback loops can amplify economic fluctuations and affect long-term growth. The results indicate that behavioral responses to GDP information may generate asymmetric consumption patterns over the cycle and influence long-run growth. While simplified, the framework offers first insights into how a widely publicized economic indicator like the GDP can shape aggregate dynamics through belief-driven behavior. Our results suggest that current macroeconomic modeling and policy analysis might be biased as they neglect this behavioral impact of GDP.