Heterogeneous beliefs and the Phillips curve

Roland Meeks and Francesca Monti

No 17537, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Heterogeneous beliefs modify the New Keynesian Phillips curve by introducing a term in the cross-section distribution of expectations. We develop a novel functional data approach to estimation and inference in survey-based Phillips curves that accounts for variation in distributions of expectations, generalizing standard approaches. Our findings demonstrate the statistical and economic importance of heterogeneous beliefs for inflation dynamics, especially during periods of macroeconomic disruption. Our findings hold in similar form across two major economies.

Keywords: Survey expectations; Inflation dynamics; Functional regression; New keynesian phillips curve; functional principal components (search for similar items in EconPapers)
JEL-codes: C4 C55 D84 E31 (search for similar items in EconPapers)
Date: 2022-09
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP17537 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Heterogeneous beliefs and the Phillips curve (2023)
Working Paper: Heterogeneous Beliefs and the Phillips Curve (2022)
Working Paper: Heterogeneous beliefs and the Phillips curve (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:17537

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP17537

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().