02215nam a2200289 a 4500 1/51314 051123s2005 lu u pdd 0 0gre 92-894-8867-0 1016-8060 (print) 1725-3187 (online) ECFIN/002566/05-EN 33195 GR-PeUP eng ΚΕΤ Αλφαβητική σειρά Bryan, Michael R. Testing near-rationality using detailed survey data / Michael R. Bryan, Stefan Palmqvist. Brussels ; Belgium : European Commission: Directorate-General for Economic and Financial Affairs, 2005. 36 σ. ; 30 εκ. Economic Papers This paper considers the evidence of "near-rationality," as described by Akerlof, Dickens, and Perry (2000). Using detailed surveys of household inflation expectations for the United States and Sweden, we find that the data are generally unsupportive of the near-rationality hypothesis. However, we document that household inflation expectations tend to settle around discrete and largely fixed "focal points," suggesting that both U.S. and Swedish households gauge inflation prospects in rather broad, qualitative terms. Moreover, the combination of a low-inflation environment and an inflation target in Sweden has been accompanied by a disproportionately high proportion of Swedish households expecting no inflation. However, a similar low-inflation trend in the United States, which does not have an explicit inflation target, reveals no such rise in the proportion of households expecting no inflation. This observation suggests that the way the central bank communicates its inflation objective may influence inflation expectations independently of the inflation trend it actually pursues. Palmqvist, Stefan. European Commission : Directorate-General for Economic and Financial Affairs. Economic papers July 2005, No 228. European Economy. Economic papers ; 228. INST UNIPILB KET 20090311 EEEP 228 EEEP 228 NOLOAN 23 1 http://ec.europa.eu/economy_finance/publications/publication_summary654_en.htm