To content

How news shape inflation perceptions

-
in
  • Research
© Springer Nature
What shapes our perceptions of inflation? A new study shows that the amount of inflation reporting matters just as much as the economic context in which the news appears.

Newspaper coverage can do more than report inflation: It can influence how people perceive future price developments. A new study in Empirical Economics examines this relationship using more than 50,000 inflation-related articles from three major German newspapers published between 2001 and 2024.

Torsten Schmidt and colleagues first measure how prominently inflation appears in the news. They then use dynamic topic modeling to distinguish different types of inflation coverage, including reporting on raw materials, monetary policy, wages, fiscal policy, and inflation in emerging markets.

The results show that the effects of news depend on both the subject of the reporting and the broader inflation environment. Coverage of raw-material prices increases households’ inflation expectations, particularly when inflation is already high. In contrast, reporting on inflation in emerging markets affects expectations mainly during periods of low inflation.

The study also finds that media attention does not always move in parallel with current inflation. News coverage can remain elevated even after inflation has declined, suggesting that inflation-related narratives may persist in public debate.

Overall, the findings highlight that the volume of inflation coverage is only part of the story. Its thematic content and the economic context in which it appears also matters for how people form expectations about future prices.

Resources

Schmidt, T., Schmidt, T., Müller, H. et al. Changing inflation perception and the propagation of news shocks. Empirical Economics 71, 30 (2026). https://doi.org/10.1007/s00181-026-02964-9