How official TV news affect public inflation expectations? Evidence from the Chinese national broadcaster China Central Television

Abstract

AbstractA burgeoning literature supports the effect of media coverage on public inflation expectations but ignores televised reports, particularly official TV news. Using bootstrap Granger non‐causality tests, this study demonstrates time‐varying causalities from the Chinese national broadcaster China Central Television (CCTV) reports to households' inflation expectations during 2014Q1–2015Q4 and 2017Q1–2018Q4 with positive effects. This indicates that official TV news leads inflation expectations. Furthermore, positive causalities from CCTV reports to the expectation heterogeneity also exist, thus meaning that more official reports may exacerbate the disagreement among households' expectations, thereby contributing to the macroeconomic instability. The content conflict is a possible reason for the positive effect of CCTV reports on the inflation expectation disagreement of households.