TY  - BOOK
AU  - Coibion,Olivier
AU  - Gorodnichenko,Yuriy
AU  - Kamdar,Rupal
ED  - National Bureau of Economic Research.
TI  - The Formation of Expectations, Inflation and the Phillips Curve
T2  - NBER working paper series
PY  - 2017///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - March 2017; Hardcopy version available to institutional subscribers
N2  - This paper argues for a careful (re)consideration of the expectations formation process and a more systematic inclusion of real-time expectations through survey data in macroeconomic analyses. While the rational expectations revolution has allowed for great leaps in macroeconomic modeling, the surveyed empirical micro-evidence appears increasingly at odds with the full-information rational expectation assumption. We explore models of expectation formation that can potentially explain why and how survey data deviate from full-information rational expectations. Using the New Keynesian Phillips curve as an extensive case study, we demonstrate how incorporating survey data on inflation expectations can address a number of otherwise puzzling shortcomings that arise under the assumption of full-information rational expectations
UR  - https://www.nber.org/papers/w23304
UR  - http://dx.doi.org/10.3386/w23304
ER  -