Discovering the Link between Inflation Rates and Inflation Uncertainty.

A new time-series model is used to reassess the strength of the link between inflation uncertainty and the level of inflation in the United States. The model provides several statistical measures that can be used to examine different aspects of uncertainty. The main finding is that uncertainty about the long rather than short-term prospects for inflation moved strongly with the rate of inflation since the early 1970s. Copyright 1991 by Ohio State University Press.