Work In Progress

Inattentive Inflation Expectations

I propose a model of expectation formation based on shopping experiences. The model decomposes the cross-sectional dispersion of household’s beliefs about inflation in three sources: Heterogeneity in consumption baskets, heterogeneity in purchasing …

Monetary Policy with Rationally Inattentive Shoppers

Households around the world believe inflation is much higher than observed in official statistics. I propose a model of expectation formation consistent with the apparent disconnect between beliefs about inflation and reality. In the model, …