, we show that an inflation bias as well as a deflationary bias exist as a steady-state outcome. We assess the predictions … inflation and deflationary biases in inflation expectations. In a model with an occasionally binding zero-lower-bound constraint … of this model using unique individual-level inflation expectations data across nine countries that allow for a direct …

inflation bias as monetary policy tries to exploit nominal wage contracts to address labor-market distortions. Although an … inflation target eliminates this inflation bias, it creates a conflict between monetary policy and discretionary fiscal policy …