Economics & Finance / Macroeconomics / Inflation & Monetary Policy

Why Most People Are Wrong About Inflation (And Who Gets It Right)

David G. Blanchflower, Conall MacCoille

Forget everything you think you know about how people form inflation expectations. A groundbreaking study by David G. Blanchflower and Conall MacCoille, using data from three major UK surveys, reveals a shocking truth: most people are completely wrong about inflation, and it's not their fault. The research shows that inflation expectations are not rational or uniform—they're deeply biased by age, education, income, and even where you live. Younger, less educated, and lower-income individuals are far more likely to have no clue about inflation, while the rich and educated get it right. Even worse, these expectations are mostly backward-looking, meaning people just guess based on what they saw last week. The Bank of England's inflation target? It's meaningless to half the population. This video breaks down the messy, unfair reality of how we all think about money, and why it matters for the economy.