‘Selective memory’ helps explain expectation de-anchoring – paper
Authors build model around three “regularities of human recall”
Economists have built a model of “selective memory” in a bid to explain why some groups experienced faster de-anchoring of inflation expectations in the recent inflation surge.
Nicola Gennaioli, Marta Leva, Raphael Schoenle and Andrei Shleifer note older people were quicker to expect higher inflation during the surge, despite experiencing lower inflation than other groups.
In a working paper published by the US National Bureau of Economic Research in June, the authors develop a memory-based model
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