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α: calibrated so average coauthorship-adjusted count equals average raw count
In recent years, a broad academic consensus has arisen that favors using rational expectations sticky‐price models to capture inflation dynamics. We review the principal conclusions of this literature concerning: (1) the ability of these models to fit the data; (2) the importance of rational forward‐looking expectations in price setting; and (3) the appropriate measure of inflationary pressures. We argue that existing models fail to provide a useful empirical description of the inflation process.