insufficient. We propose a new explanation for this puzzle within the context of a standard Phillips curve. If firms' inflation … expectations track those of households, then the missing disinflation can be explained by the rise in their inflation expectations … households. The rise in household inflation expectations from 2009 to 2011 can be explained by the increase in oil prices over …

adjustment. As a result, the response of inflation to nominal shocks is both sluggish and hump-shaped. The model can also … qualitatively capture a number of stylized facts about price setting at the micro level and inflation at the macro level …

This study analyzes how firms form their inflation expectations during a regime change in monetary policy and a … transition to a low-inflation environment. Using the Bank of Israel survey of firms, we document the basic properties of firms …' inflation expectations and examine how Israeli firms update their inflation expectations after receiving new information about …

With positive trend inflation, the Taylor principle is not enough to guarantee a determinate equilibrium. We provide … new theoretical results on restoring determinacy in New Keynesian models with positive trend inflation and combine these … variables and the decline in trend inflation during the Volcker disinflation …