Empirical evidence suggests consumers rely on their shopping experiences to form beliefs about inflation. In other words, they "learn by shopping". I introduce this empirical observation as an informational friction in the New Keynesian model and use it to study its consequences for the...

This study uses a Markov regime-switching model with time-varying means to identify subnational, sectoral, and national economic phases. The model replicates the official business cycle dates in Mexico and quantifies the contributions of states, regions, and sectors to the national recession...

We provide theory and evidence that relative price shocks can cause aggregate inflation and act as aggregate supply shocks. Empirically, we show that exogenous positive energy price shocks have a positive impact not only on headline but also on U.S. core inflation while depressing U.S. real...