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Vol. 61, No. 4
Posted 1980-04-01

The Formation of Inflation Expectations

by David H. Resler

This article investigates the process by which inflation expectations are formed and the relevance of error-learning models for analyzing revisions in these expectations, using Joseph Livingston’s survey data. The extent of error-learning in the revision of inflation expectations, as well as the process by which these expectations are formed, offers useful clues about the efficacy of inflation-reducing strategies.