This paper tests a version of the rational expectations hypothesis using 'fixed-event' inflation forecasts for the UK … rolling event data. The results show evidence of a positive bias in inflation expectations. Evidence for inefficiency is much …

separate inclusion of a labor market in the model helps to anchor inflation even in a situation of adaptive expectations, a … positive output gap and inflation above target. The estimation results show that the adaptive learning model does a better job … and inflation far above the central bank target. …