Damjanovic, Tatiana; Girdėnas, Šarūnas; Liu, Keqing - In: Economics Letters 130 (2015) C, pp. 93-96
In this paper, we consider a model where producers set their prices based on their prediction of the aggregated price level and an exogenous variable, which can be a demand or a cost-push shock. To form their expectations, they use OLS-type econometric learning with bounded memory. We show that...