How Inflation Expectations De-Anchor: The Role of Selective Memory Cues

Abstract

In a model of memory and selective recall, household inflation expectations remain rigid when inflation is anchored but exhibit sharp instability during inflation surges, as similarity prompts retrieval of forgotten high-inflation experiences.Using data from the New York Fed's Survey of Consumer Expectations and the University of Michigan's Consumer Survey, we show that similarity can quantitatively account for the sharp post-pandemic rise in inflation expectations, particularly among the elderly.The memory-based model also accounts for how people estimate future inflation ranges and why they neglect infrequent experiences when forming point expectations.These predictions are likewise supported by the data.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 13 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.