interest rate has to respond more than one-for-one to fluctuations in the inflation rate. In our setting, the average inflation … rate fluctuates around the inflation target if the computerized central bank obeys the Taylor principle. If the Taylor … principle is violated, then the average inflation rate persistently deviates from the target. We find that these deviations from …

Inflation expectations are central to economics because they affect the effectiveness of fiscal and monetary policy as … well as realized inflation. We survey the recent literature with a focus on the inflation expectations of households. We … first review standard data sources and discuss their advantages and disadvantages. We then document that household inflation …