money, real output, and inflation. The key properties to be explained are that monetary shocks have persistent, but not … permanent, effects on real output, and that the correlation between current output and inflation is positive for leads of … inflation and negative for lags of inflation. The paper begins with a short empirical guide to price- and wage-setting behavior …

"This paper documents the evolution of long-run inflation expectations and models the stance of monetary policy from … 1965 to 1980. A host of survey-based measures and financial market data indicate that long-run inflation expectations rose … with a constant inflation goal, our analysis indicates that the path of policy can be characterized by a reaction function …