Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/227929
Authors: 
Bracha, Anat
Tang, Jenny
Year of Publication: 
2019
Series/Report no.: 
Working Papers No. 19-14
Abstract: 
Inflation expectations are key to economic activity, and in the current economic climate of a heated labor market, they are central to the policy debate. At the same time, a growing literature on inattention suggests that individuals, and therefore individual behavior, may not be sensitive to changes in inflation when it is low. This paper explores evidence of such inattention by constructing three different measures based on the University of Michigan's Survey of Consumers 1-year ahead inflation expectations. Exploring inflation thresholds of 2, 3, and 4 percent, our findings are consistent with the inattention hypothesis.
Subjects: 
inattention
inflation expectations
Phillips curve
JEL: 
D83
D84
E31
E71
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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