A constant price level facilitates cooperation among firms whereas steady inflation and deflation rates lower firms …' ability to cooperate. In an experimental market with price competition we show that both inflation and deflation signicantly … welfare: depending on the market structure, inflation and deflation lead to significantly lower real prices and higher welfare. …

We study how inflation and deflation affect firms' ability to cooperate in an experimental Bertrand duopoly with … differentiated products. We find that there is significantly less cooperation in the treatments with inflation and deflation compared … to the no-inflation treatments. The difficulties to cooperate affect prices and welfare: Depending on the market …

Poor households report significantly higher inflation expectations than rich households. We assess, both theoretically … about aggregate inflation. Using data on shopping experiences, we show that the inflation expectations of each income group … depend on the group's past grocery experiences as well as on past aggregate inflation. To explain this finding, we build a …