Survey data indicate that a relatively large share of households is ill-informed about the rate of inflation in the economy, with perceived and expected rates of inflation deviating substantially from official measures. Using Swedish micro-level data, we find that such inflation illiteracy is...

Survey data indicate that a relatively large share of households is ill-informed about the rate of inflation in the economy, with perceived and expected rates of inflation deviating substantially from official measures. Using Swedish micro-level data, we find that such inflation illiteracy is...

The purpose of the present paper is to study how households form inflation expectations. Using a novel survey-base dataset of Italian households' opinions of inflation we investigate two separate, but related, types of behavior: 'inattentiveness' and 'anchoring'. The present analysis extends the...

One of the consequences of the euro changeover in 2002 was that for a period of several years people considerably overestimated actual inflation. The goal of this paper is to study whether misperceptions of this kind may have real effects, that is, whether they induce people to alter their...