Disagreement in inflation expectations observed from survey data varies systematically over time in a way that reflects … the level and variance of current inflation. This paper offers a simple explanation for these facts based on asymmetries … in the forecasters' costs of over- and under-predicting inflation. Our model implies (i) biased forecasts; (ii) positive …

Recent empirical work documents substantial disagreement in inflation expectations obtained from survey data … current inflation. This paper offers a simple explanation for these facts based on asymmetries in the forecaster's costs of … over- and under-predicting inflation. Our model implies biased forecasts with positive serial correlation in forecast …

curves display similar patterns of instability and to examine lead-lag patterns in how individual inflation series change. We …