panel data for the period from April 2009 to November 2012, we examine the relationship between a household's inflation … expectations and its current spending by taking into account other factors, such as the household's wage growth expectations, the … uncertainty surrounding its inflation expectations, macroeconomic conditions, and unobserved heterogeneity at the household level …

I construct a novel measure of household uncertainty based on survey data for European countries. I show that household … uncertainty shocks are not universally like negative demand shocks. Notably, household uncertainty shocks are largely inflationary … role in the transmission of household uncertainty to inflation. I develop an Overlapping Generations New Keynesian model …