People's Understanding of Inflation

it is a constant mystery to me how people respond to price inflation, made worse in the current period. A new paper reminds me that while people's thinking is incoherent about many things, and inflation is high among them:

[T]here is a widespread belief that managing inflation can be achieved without significant trade-offs, such as reducing economic activity or increasing unemployment. These perceptions are hard to move experimentally.

Wish-thinking carried to extremes.

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