Drawing on an extensive empirical literature that suggests persistent and time-varying heterogeneity in inflation expectations, this paper embeds two inflation forecasting heuristics – one based on the current rate of inflation, the second anchored to the official inflation target – in a...

Motivated by a considerable (experimental and empirical) evidence on endogenous labor effort and inter- and intra-industry wage differentials, this paper explores implications for income distribution, capacity utilization and economic growth of firms using different strategies to elicit effort...

We provide evolutionary game-theoretic microfoundations to a dynamic complete nominal adjustment in response to a monetary shock by introducing a novel analytical notion we call boundedly rational inattentiveness. We investigate the behavior of the general price level in a context where a firm...

We provide evolutionary game-theoretic microfoundations to a dynamic complete nominal adjustment in response to a monetary shock. To this end, we develop an approach based on a new analytical notion to which we refer as boundedly rational inattentiveness. We investigate the behavior of the price...

We derive a best-reply monetary policy when the confidence by price setters on the monetary authority’s commitment to price level targeting may be both incomplete and sticky. We find that complete confidence (or full credibility) is not a necessary condition for the achievement of a price...

We study the dynamics of an inflation targeting regime in a macroeconomic context represented by a three-equation model (IS curve, Phillips curve and interest rate rule) and with heterogeneous strategies to form expectations of inflation. Economic agents choose between using the official...

Drawing on a considerable empirical and experimental literature that finds persistent and endogenously time-varying heterogeneity in inflation expectations, this paper embeds two inflation forecasting strategies – one based on costly full rationality or perfect foresight, the second based on...

This paper sets forth a Neo-Kaleckian model of capacity utilization and growth with distribution featuring a profit-sharing arrangement. While a given proportion of firms compensate workers with only a base wage, the remaining proportion do so with a base wage and a share of profits. Consistent...

By exploring the implications of a Multi-Sector Thirlwall’s Law, this paper reports empirical exercises that contribute to an understanding of the relationship between structural change, external constraint and growth in Brazil in the 1962-2006 period. Given the sectoral nature of these...

This paper focuses on the role of the production and trade structures in shaping conflicting claims over income shares and the dynamics of the real exchange rate in a Neo-Kaleckian macroeconomic model of growth and distribution. In the medium run, the economy adjusts to comply with two...