A naïve sticky information model of households' inflation expectations
This paper shows that the Michigan survey data on inflation expectations is consistent with a simple sticky information model where a significant proportion of households base their inflation expectations on the past release of actual inflation rather than the rational forward-looking forecast. In particular, the model can explain both the mean and cross-sectional distribution of households' inflation expectations.
Year of publication: |
2009
|
---|---|
Authors: | Lanne, Markku ; Luoma, Arto ; Luoto, Jani |
Published in: |
Journal of Economic Dynamics and Control. - Elsevier, ISSN 0165-1889. - Vol. 33.2009, 6, p. 1332-1344
|
Publisher: |
Elsevier |
Keywords: | Inflation expectations Heterogeneous expectations Survey expectations Sticky information Bayesian analysis |
Saved in:
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