Why do we think that inflation expectations matter for inflation? (And should we?)

Jeremy B. Rudd

Review of Keynesian Economics, 2022, vol. 10, issue 1, 25-45

Abstract: Economists and economic policymakers believe that households’ and firms’ expectations of future inflation are a key determinant of actual inflation. A review of the relevant theoretical and empirical literature suggests that this belief rests on extremely shaky foundations, and a case is made that adhering to it uncritically could easily lead to serious policy errors.

Keywords: inflation dynamics; wage determination (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (11)

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