in tailored panel surveys of German firms and households, conducted before and during a large shock to inflation. Using … are more likely to adjust inflation expectations during the shock, have higher confidence in their beliefs, and hold … smaller misperceptions about realized inflation, yet their expectations about future inflation deviate more strongly from …

-in the context of a historic surge in inflation. We measure economic narratives in open-ended survey responses and represent …, households' narratives strongly shape their inflation expectations, which we demonstrate with descriptive survey data and a …