Learning about Inflation and Exchange Rates: Beliefs and Consumer Behavior in a Small Open Economy

We study how expert forecasts about inflation and nominal exchange rates affect households inflation perceptions, exchange rate beliefs, and later durable-goods holdings in a small open economy. Using a randomized information experiment in Suriname, we provide households with expert forecasts about future inflation and depreciation. At baseline, households substantially underestimate both inflation and depreciation, and the information treatments generate large upward revisions in expectations. Linking the experiment to follow-up data two years later, we find lower ownership of tradable durable goods among households exposed to macroeconomic forecasts, particularly consumer electronics. Results suggest that households interpret macroeconomic forecasts as informative about broader economic conditions rather than only about relative prices.