While it is widely accepted that there are adjustment costs associated with the reallocation of resources in response to freer trade, in most models these costs are assumed to be very small. However, more recent evidence is casting doubt on this assumption. This paper develops a unique dataset...

We investigate the updating behavior of individual consumers regarding their short and long-run inflation expectations. Utilizing the University of Michigan Survey of Consumer's rotating panel microstructure, we can identify whether individuals adjust their inflation expectations over a period...