Working papers

Anchoring inflation expectations is central to effective monetary policy, yet relatively little empirical work explores how the term structure of expectations responds to different types of monetary surprises across inflationary regimes. Building on the identification strategy of Jarociński and Karadi (2020), which separates monetary policy surprises into pure rate shocks and central bank information shocks, I examine how each type of shock affects the term structure of survey-based inflation expectations (1–30 years) using a state-dependent local projection framework that incorporates Shapiro's (2024) decomposition of inflation into supply- and demand-driven components. While conventional monetary policy shocks predominantly influence short- and medium-term expectations, central bank information shocks exhibit broader and more persistent effects across the entire horizon — and supply-driven inflation regimes amplify the response of expectations, whereas demand-driven regimes attenuate them. The findings suggest that the effectiveness of monetary policy, particularly forward guidance, depends not only on the nature of the policy innovation but also on the underlying sources of inflation.

Merit-based scholarships are typically found to be regressive because academic eligibility correlates with family income. Using tax-linked data from Chetty et al. (2020), we document an exception. Following the 2004 introduction of Tennessee's HOPE Scholarship, the bottom-quintile share at Tennessee public colleges rose by 1.50 percentage points relative to non-merit control states, with a monotonic gradient across all five income quintiles. Total enrollment at Tennessee publics expanded by roughly seven percent, indicating that the compositional shift reflects system expansion rather than displacement of higher-income students. The effect concentrates at community colleges and is larger for female students, consistent with HOPE's permissive eligibility threshold (GPA 3.0 or ACT 21) binding most tightly at the marginal-eligibility margin. Cross-state evidence supports a design-based interpretation: Massachusetts (progressive) and South Dakota (regressive) produce compositional shifts in directions predicted by their threshold strictness and award structure. The Tennessee result is robust to unit-specific detrending, to Rambachan–Roth sensitivity at breakdown values above M* = 2, and to a triple-difference specification that differences out Tennessee-wide trends. Program design — threshold strictness, first-dollar status, and capacity response — predicts whether merit aid expands access or concentrates it.

Household survey data contain a robust reversal of the Phillips-curve sign: consumers who expect higher unemployment also expect higher inflation, while professional forecasts and post-1980s U.S. data display the conventional negative relationship. Respondents in the Survey of Consumer Expectations who simultaneously expect higher inflation and higher unemployment also report higher personal job-loss risk, suggesting the distortion extends to perceived labor-market conditions. I embed this fact in a New Keynesian search-and-matching model with rational inattention, where workers with limited information capacity choose what to pay attention to. Supply-side risks receive more attention because they are costly on every margin; demand-driven improvements in the labor market are tracked less closely because higher prices partly offset a tighter job market. When a demand expansion improves workers' bargaining position, inattentive workers do not fully perceive the improvement and accept wages that are too low. The resulting wage rigidity is endogenous rather than imposed. At the quarterly structural calibration, the wage distortion after demand shocks is five times larger than after supply shocks, and this asymmetry is robust to the flow value of unemployment, supply-shock persistence, and the wage-belief elasticity.