Kokonas, Nikolaos; Rousakis, Michalis; Smyrniotis, Efthymis - 2023
What determines the stochastic path of inflation? We study this question in a monetary economy featuring imperfect … information and rational expectations. The central bank follows an inflation targeting rule and communicates noisy information … about the future state of the economy to market participants through its public forecasts of inflation and output. Agents …