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Monetary Misperceptions, Output and Inflation Dynamics

Harris Dellas () and Fabrice Collard

No 7644, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We revisit the contribution of misperceived money to business cycles, and in particular to the inertial dynamics of inflation following a monetary policy shock. We establish three things. First, the difference between preliminary and revised money data captures monetary misperceptions well. Second, misperceived money is quantitatively substantial and also matters significantly for economic activity. And third, imperfect information about monetary aggregates can help the standard NK model exhibit inertial inflation dynamics.

Keywords: Inflation inertia; Measurement error; Monetary misperceptions (search for similar items in EconPapers)
JEL-codes: E32 E52 (search for similar items in EconPapers)
Date: 2010-01
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Citations: View citations in EconPapers (15)

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Journal Article: Monetary Misperceptions, Output, and Inflation Dynamics (2010)
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