Adam, Klaus; Padula, Mario - Centro Studi di Economia e Finanza (CSEF) - 2002
Professional Forecasters as proxy for expected inflation. We find that the NKPC captures inflation dynamics well, independent from … better than under rational expectations. We also find that lagged inflation enters the price equation significantly … suggesting that there is a role for lagged inflation beyond that of capturing non-rationalities in expectations. Estimating the …