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R. Gonçalves

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Case report Sep 2026

Inflation Inattention on the Production Network: Firm-Level Evidence and Macro Implications

Relying on a micro-level dataset of US firms' inflation expectations, we document that firms in industries with larger Domar weights and more flexible prices have more accurate inflation forecasts. To explain these patterns, we develop a rational inattention model of price-setting firms within a production network. In...

R. Gonçalves, Ina Hajdini · 0 citations

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