Accepted Article THE EFFECTS OF PROTESTS ON AGENTS EXPECTATIONS: EVIDENCE FROM STUDENTS’ DEMONSTRATIONS IN CHILE Short running title: Protests and Expectations JUAN A. CORREA, 1 RAÚL MORALES, 2 AND FRANCISCO PARRO 3* 1 Facultad de Economia y Negocios, Universidad AndresBello, Santiago, Chile; 2 Department of Economics, Cornell University, Ithaca, New York, USA; and 3 School of Business, Universidad Adolfo Ibáñez, Santiago, Chile * Corresponding author: Francisco Parro, School of Business, Universidad Adolfo Ibáñez, Av. Diagonal Las Torres 2700, Santiago, Chile. Email: fjparrog@gmail.com First version received March 2016; final version accepted September 2017 We use a narrative approach to study the effects of protests on agents’ expectations. The shocks arose from Chile’s student demonstrations. Those demonstrations, led by university and secondary students, raised demands related to greater involvement of the state in the funding, provision, and regulation of the education sector. We find a negative response of both a consumer confidence index and a business confidence index in the face of those demonstrations. The negative effect of the protests on the consumer confidence index lasted, on average, six months after the demonstrations. The impact of the protests on the business confidence index was more limited, although still negative and statistically significant. Keywords: Protests; Narrative approach; Expectations JEL classification: E21; E23; H00 This article is protected by copyright. All rights reserved. This article has been accepted for publication and undergone full peer review but has not been through the copyediting, typesetting, pagination and proofreading process, which may lead to differences between this version and the Version of Record. Please cite this article as doi: 10.1111/deve.12180