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Inflation Dynamics: The Role of Expectations

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  • RICARDO NUNES

Abstract

This paper estimates the Phillips curve allowing for a simultaneous role of rational and survey expectations. We consider both a reduced form and a structural specification of the Phillips curve. The results suggest that survey expectations can be a statistically significant component of firms' expectations and inflation dynamics. However, rational expectations continue to play a dominant role.

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  • Ricardo Nunes, 2010. "Inflation Dynamics: The Role of Expectations," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(6), pages 1161-1172, September.
    • Handle: RePEc:wly:jmoncb:v:42:y:2010:i:6:p:1161-1172
    DOI: 10.1111/j.1538-4616.2010.00324.x
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