. Adding inflation as a second variable, we uncover two states in which expected consumption growth is low, one with high and … one with negative expected inflation. Embedded in a general equilibrium asset pricing model with learning, these dynamics …

and inflation rates. Building on the lessons from recent advances in time-series econometrics, we suggest instead that one …

A key application of long memory time series models concerns inflation. Long memory implies that shocks have a long … such level shifts are not unlikely for inflation, where the shifts may be caused by sudden oil price shocks, we examine … exaggerated. Our main findings are that apparent longmemory is quite resistant to level shifts, although for a few inflation rates …