good job of explaining the deviations of household inflation and unemployment expectations from the `rational expectations …Since the foundational work of Keynes (1936), macroeconomists have emphasized the importance of agents' expectations in … empirical expectations data, instead assuming all agents' expectations are 'rational.' This paper takes up the challenge of …

innovations, and negatively correlated with inflation innovations. The disinflationary nature of news shocks is consistent with …

unemployment on inflation, for given expected inflation, decreased until the early 1990s, but has remained roughly stable since …-recession trend, suggesting hysteresis. Second, while inflation has decreased, it has decreased less than anticipated, suggesting a … breakdown of the relation between inflation and activity. To examine the first, we look at 122 recessions over the past 50 years …

based on the assumptions that inflation expectations are fully anchored at the Federal Reserve's target, and that labor …-market slack is captured by the level of short-term unemployment. This equation explains inflation behavior since 2000, including … the failure of high total unemployment since 2008 to reduce inflation greatly. The fit of our equation is especially good …

Why is it that inflation is persistently high in some periods and persistently low in other periods? We argue that lack …, absence of commitment leads to multiple equilibria, or expectation traps. In these traps, expectations of high or low … inflation lead the public to take defensive actions which then make it optimal for the monetary authority to validate those …

If inflation expectations become firmly anchored at the inflation target even when average inflation deviates from the … target, the long-run Phillips curve becomes non-vertical. During 1997-2011, average inflation expectations in Sweden have … unemployment rate has been about 0.8 percentage points higher than if average inflation had been on target. This is a large …

Most wage-contracting models with rational expectations fail to replicate the persistence in inflation observed in the … data. We argue that coordination problems and multiple equilibria are the keys to explaining inflation persistence. We … of equilibria (consistent with a range for the rate of unemployment), where workers want to match the wage set by other …

This paper describes a new data set of the forecasts of output growth, inflation, and unemployment prepared by …

. This suggests that currency depreciation can help reduce unemployment only insofar as it is associated with inflation, and …This paper discusses three policy tools to mitigate jobless recoveries during financial crises: inflation, real … document that large inflationary spikes appear to help unemployment to get back to pre-crisis levels. However, the counterpart …

for the unemployment-inflation tradeoff and for the conduct of monetary policy.lt;brgt;lt;brgt;We proceed in two steps. We … staggered price setting by firms. We derive the relation between inflation and unemployment and discuss how it is influenced by …We construct a utility-based model of fluctuations, with nominal rigidities and unemployment, and draw its implications …