inflation and the output gap by at least two-thirds. These stabilization benefits can be substantially smaller if expectations …

under alternative policy regimes. In our experimental economy, monetary policy targets inflation around a constant or state … communicating the state-dependent inflation targets reduce the duration or severity of economic crises. Introducing anticipated and …

Establishing the external validity of experimental inflation forecasts is essential if laboratory experiments are to be … used as decision-making tools for monetary policy. Our contribution is to document whether different measures of inflation … information, suggesting the presence of some form of bounded rationality or information imperfections. Finally, lagged inflation …

measured by the variance is significantly larger than the amplitude under RE, implying persistent excess volatility. However …

and during a historic shock to inflation, we document three sets of results: First, at-tention to the macroeconomy is … likely to adjust inflation expectations during the shock, have higher confidence in their beliefs, and hold smaller … misperceptions about re-alized inflation, yet their expectations about future inflation deviate more strongly from professional …

in tailored panel surveys of German firms and households, conducted before and during a large shock to inflation. Using … are more likely to adjust inflation expectations during the shock, have higher confidence in their beliefs, and hold … smaller misperceptions about realized inflation, yet their expectations about future inflation deviate more strongly from …