Empirical evidence suggests that considerable differentials in inflation rates exist across households. This paper … investigates how central banks should react to household inflation heterogeneity in a tractable New Keynesian model. We include two … households that differ in their consumer price inflation rates after adverse shocks. The central bank reacts to either an average …

sample of 28 nations within the European Union, the study examined the degree to which economic growth and inflation impacted … that economic sentiment and household consumption were significantly shaped by the proxies of economic growth and inflation …. Moreover, in the case of economic sentiment, the negative impact of inflation was much stronger than the positive impact of …

role in the transmission of household uncertainty to inflation. I develop an Overlapping Generations New Keynesian model …