Palmqvist, Stefan; Bryan, Michael F. - Society for Computational Economics - SCE - 2005
This paper considers the evidence of “near-rationality†in household inflation expectations, as described by Akerlof …, Dickens, and Perry (2000), hereafter ADP. According to ADP, the economic incentive to anticipate inflation varies from agent … to agent, and as inflation falls, some agents stop trying to accurately predict inflation (“hyper-rationalâ€) and …