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. …

using existing macroeconomic models by modifying expectations about policy announcements. The main advantage of our method …

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 …

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 …

We assess how firm expectations about future production impact current production and pricing decisions. Our analysis … is based on a large survey of firms in the German manufacturing sector. To identify the causal effect of expectations, we … expectations also matter even if they turn out to be incorrect. Lastly, we aggregate expectation errors across firms and find that …

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

may or may not coordinate on the rational equilibrium outcome. A general finding is that under positive expectations … feedback (strategic complementarity) - where optimistic (pessimistic) expectations can cause a boom (bust) - coordination … by coordination on trend-following behavior leading to (almost-)self-fulfilling equilibria. Heterogeneous expectations …