expectations assumption, we show the transition may initially be inflationary. …

Consumers' inflation expectations play a key role in the monetary transmission mechanism. As such, it is crucial for … expectations. These include the apparent overestimation of inflation by consumers as well as the negative correlation observed … between the economic outlook and inflation expectations. We also show that the uncertainty framework fits with some of the …

We provide a new theory of expectations-driven business cycles in which consumers' learning from prices dramatically …

helps overall macroeconomic stability by making expectations operate like automatic stabilizers. Second, under a price level … arguments in favour of or against price level path stability depend on the degree of dependence of private sector expectations …

may or may not coordinate on the rational equilibrium outcome. A general finding is that under positive expectations … feedback (strategic complementarity) - where optimistic (pessimistic) expectations can cause a boom (bust) - coordination … by coordination on trend-following behavior leading to (almost-)self-fulfilling equilibria. Heterogeneous expectations …

expectations, which is detrimental to welfare. …

knowledge of their personal circumstances but "sticky expectations" about the macroeconomy. In our model, the persistence of …