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Learning dynamics in the formation of European inflation expectations

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  • Christina Bräuning
  • Carin van der Cruijsen

Abstract

We investigate learning dynamics in the formation of household inflation expectations in the six largest euro area countries. Our findings reveal heterogeneity in the learning rules that European households use to forecast inflation. We also find pronounced heterogeneity in the way consumers process new data. These differences vary not only across countries but also over time, suggesting that the learning behavior of households is state dependent.

Suggested Citation

  • Christina Bräuning & Carin van der Cruijsen, 2019. "Learning dynamics in the formation of European inflation expectations," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 38(2), pages 122-135, March.
    • Handle: RePEc:wly:jforec:v:38:y:2019:i:2:p:122-135
    DOI: 10.1002/for.2553
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    Cited by:

    1. Cole, Stephen J. & Milani, Fabio, 2021. "Heterogeneity in individual expectations, sentiment, and constant-gain learning," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 627-650.

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