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Mridula Profile picture
Mridula
@Mridgyy
Angry Macroeconomist @UofGlasgow. Previously @warwickecon, @UABbarcelona and @bse_barcelona. She/Her. Dog Lover.
Nov 21, 2022 • 4 tweets • 2 min read
🚨Job Market Paper🚨

Do inflation expectations respond to changes in Monetary Policy (Inflation Targeting (IT))?

The answer? No! But there are nuances.

Key Result 📢: Inflation leads expectations.

Details in the thread. #EconTwitter #Jobmarketpaper #Econjobmarket Image Rational Expectations: Agents immediately adjust expectations to the target.

Adaptive Learning: Priors do not adjust after the introduction of IT. Image