interest rate rule, raising the possibility of inefficient fluctuations due to the dependence of expectations on extraneous … combine forward looking expectations and predetermined variables. We consider a variety of specifications that incorporate …

This paper analyzes how the formation of expectations constrains monetary and fiscal policy design. Economic agents … the policy regime using historical data. Regime uncertainty substantially narrows, relative to a rational expectations … analysis of the model, the menu of policies consistent with expectations stabilization. When agents are learning about the …

inflation and deflationary biases in inflation expectations. In a model with an occasionally binding zero-lower-bound constraint … of this model using unique individual-level inflation expectations data across nine countries that allow for a direct … identification of these biases. Both inflation and deflationary biases are present (and sizable) in inflation expectations of these …

unconventional policies that aim to increase households' spending directly through managing their expectations. We first show … theoretically and empirically that higher in ation expectations increase households' consumption. We then design a difference … demand via managing expectations. Whereas unconventional fiscal policy increases households' expectations and spending …

substantially. We document this fact by comparing an easy-to-grasp expectations-based policy, unconventional fiscal policy, with a … consumption via managing inflation expectations based on the Euler equation. Unconventional fiscal policy uses trivial … announcements of future consumer-price increases to boost inflation expectations and consumption expenditure on impact. Instead …

inferences under rational expectations, whereas the fraction of backward looking price setters increases. …

households’ short- and long-term expectations about future inflation. This relationship is strong during periods of high …. Our results show that household perceptions about past inflation drive their expectations about future inflation rates …. The strength of the pass-through from perceptions to expectations varies across socioeconomic groups. We identify two …

to unemployment over the last decade is a result of firmly anchored inflation expectations. …

We study the behavior of U.S. consumers' inflation expectations during the high inflation period of 2021-22 using data … from the Survey of Consumer Expectations. Short- and, to a lesser extent, mediumterm inflation expectations rose as … inflation continued to climb, medium- and longerterm inflation expectations unexpectedly fell and medium- and longer …