Empirical evidence suggests consumers rely on their shopping experiences to form beliefs about inflation. In other …. Learning by shopping anchors households' beliefs about inflation to its past, causing disagreement with firms over the value of … inflation, increases the degree of anchoring of households' inflation expectations, and flattens the slope of the Phillips curve …

This paper considers a sticky price model with a cash-in-advance constraint where agents forecast inflation rates with … consistent with rational expectations once learning is complete. When past performance governs the choice of forecast model …, agents may prefer to use the inconsistent forecast model, which generates an equilibrium where forecasts are inefficient …

their heterogeneity. We exploit survey data on output and inflation expectations by individual professional forecasters. We …