Modern economic theory underlines the importance of expectations. However, it is less obvious how expectations are formed and how they should be measured. This paper analyses the role of inflation and output growth expectations in the US, the euro area and Japan. On the one hand, the question is...

We argue that the New-Keynesian Phillips Curve literature has failed to deliver a convincing measure of real marginal costs. We start from a careful modeling of optimal price setting allowing for non-unitary factor substitution, non-neutral technical change and time-varying factor utilization...

We argue that the New-Keynesian Phillips Curve literature has failed to deliver a convincing measure of “fundamental inflation”. We start from a careful modeling of optimal price setting allowing for non-unitary factor substitution, non-neutral technical change and timevarying factor...