Inflation targets come in different shapes and sizes. We explore the choice of a point or band target for inflation in a stylised economy in which agents learn about the inflation-generating process. We simulate under two conditions, namely i) a point inflation target and ii) a band inflation...

Asymmetric information between the central bank and bond markets creates an inference problem that affects the behaviour of long interest rates. This paper employs a simple macroeconomic model with a time-varying infation target to illustrate the implications of asymmetry for the sensitivity of...

This paper estimates the path of inflation persistence in the United States over the last 50 years and draws implications about the evolution of the Federal Reserve's monetary-policy preferences. Standard models of central bank optimization predict that the central bank's preference for output...

Expectations about future housing prices are arguably an important determinant of actual housing prices, and an important input in decisions on whether and how to transact in the housing market. Using novel micro-level survey data on Swedish households, we analyse households' expectations of...

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...

Household expectations of future mortgage rates elicited over the last few years might appear unrealistically low. However, taking explicit account of the high persistence in interest rates, we find that Swedish households' implied long-term expectation of mortgage rates is around 4.7 percent....

Expectations about future housing prices are arguably an important determinant of actual housing prices, and an important input in decisions on whether and how to transact in the housing market. Using novel micro-level survey data on Swedish households, we analyse households' expectations of...