Kilian, Lutz; Zhou, Xiaoqing - 2020 - This version: September 9, 2020
The conventional wisdom that inflation expectations respond to the level of the price of oil (or the price of gasoline … price shocks may indeed drive one-year household inflation expectations. The model shows that there have been several such … explained by a large increase in gasoline prices. However, on average, gasoline price shocks account for only 39% of the …