This paper considers a sticky price model with a cash-in-advance constraint where agents forecast inflation rates with …. While average output and inflation result the same as under rational expectations, higher moments differ substantially …: output and inflation show persistence, inflation responds sluggishly to nominal disturbances, and the dynamic correlations of …

Empirical evidence suggests consumers rely on their shopping experiences to form beliefs about inflation. In other …. Learning by shopping anchors households' beliefs about inflation to its past, causing disagreement with firms over the value of … inflation, increases the degree of anchoring of households' inflation expectations, and flattens the slope of the Phillips curve …

in principle less restrictive approach is applied to operationalising expectations. Direct measures of inflation … expectations, i.e. OECD forecasts, are used as empirical proxies of economic agents' inflation expectations. The main interest is … in the euro area as a whole, although potential heterogeneity of inflation dynamics is also examined across eleven EMU …