inflation volatility. Contrary to comparable models based on full rationality, the behavioral model predicts that inflation … volatility can be lowered if the central bank reacts to the output gap in addition to inflation. We test the opposing theoretical … reacting to the output gap in addition to inflation can indeed lower inflation volatility. …

predicts that inflation volatility can be lowered if the central bank reacts to the output gap in addition to inflation. We … results support the claim that output stabilization can lead to less volatile inflation …

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 …

Inflation expectations are central to economics because they affect the effectiveness of fiscal and monetary policy as … well as realized inflation. We survey the recent literature with a focus on the inflation expectations of households. We … first review standard data sources and discuss their advantages and disadvantages. We then document that household inflation …