Consumers' inflation expectations play a key role in the monetary transmission mechanism. As such, it is crucial for … expectations. These include the apparent overestimation of inflation by consumers as well as the negative correlation observed … between the economic outlook and inflation expectations. We also show that the uncertainty framework fits with some of the …

expectations assumption, we show the transition may initially be inflationary. …

helps overall macroeconomic stability by making expectations operate like automatic stabilizers. Second, under a price level … arguments in favour of or against price level path stability depend on the degree of dependence of private sector expectations …

We provide a new theory of expectations-driven business cycles in which consumers' learning from prices dramatically …

expectations, which is detrimental to welfare. …

Rational expectations has been the dominant way to model expectations, but the literature has quickly moved to a more … their expectations. A standard assumption is that agents form expectations by using the correctly specified reduced form … included. Therefore, agents base expectations on a misspecified MSV solution. In contrast, we assume agents know the deep …

expectations by Bayesian learning based on observations from their own lifetimes. In this model, the stock price exhibits … stochastic boom-and-bust fluctuations around the rational expectations equilibrium. This heterogeneous-agents economy can be …

knowledge of their personal circumstances but "sticky expectations" about the macroeconomy. In our model, the persistence of …