This paper characterizes equilibrium outcomes of extensive form games with incomplete information in which players can sign renegotiable contracts with third-parties. Our aim is to understand the extent to which third-party contracts can be used as commitment devices when it is impossible to...

This paper examines the case that there has been a structural change in the determination of inflation in the EU (and elsewhere) that has led to a low real-wages, low inflation, slow productivity growth regime. In fact, there appears to have been no structural change. Instead, there has been a...

This paper aims at assessing the impact of inflation targeting on actual inflation when considering inflation perceptions together with interrelated inflation expectations, modifying the seminal papers of Barro and Gordon (1983a and 1983b). The modeling of inflation perceptions and of inflation...

Using sector-level survey data for the universe of Japanese firms, we establish the positive co-movement in the firm’s expectations about aggregate and sector-specific demand shocks. We show that a simple model with imperfect information on the current aggregate and sector-specific components...