Dräger, Lena; Menz, Jan-Oliver; Fritsche, Ulrich - 2011
Building on Prospect Theory, we apply the concept of loss aversion to the formation of inflation perceptions and test … empirically for non- linearities in the inflation-perceptions relation for a panel of 10 Euro area countries. Specifically, under …. Rejecting rationality of inflation perceptions in general under symmetric loss and in a majority of cases under flexible loss …