One of the dangers of high inflation is that it can cause businesses and households to pay close attention to it. This internalization of inflation can lead to an accelerating regime, making inflation more difficult to control. We empirically evaluate the relationship between attention and the level of inflation for 37 countries. Our attention measures are constructed either from internet search behavior or the popularity of inflation mentions on Twitter. We find evidence that attention thresholds exist for the majority of countries in our sample. We also find interesting variability across countries.
Here is the full paperby Oleg Korenok, David Munro and Jiayi Chen, via John Chilton.