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Building on Prospect Theory, we apply the concept of loss aversion to the formation of inflation perceptions and test … the assumption of loss aversion, inflation changes above a certain reference rate will be perceived more strongly …. Rejecting rationality of inflation perceptions in general under symmetric loss and in a majority of cases under flexible loss …
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We consider estimation and inference for a regression coefficient in panels with interactive fixed effects (i.e., with a factor structure). We show that previously developed estimators and confidence intervals (CIs) might be heavily biased and size-distorted when some of the factors are weak. We...
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