This paper advances the hypothesis that the transition from there-is-little-central-banks-can-do-to-control-inflation … to inflation targeting occurred because central banks, especially the Federal Reserve, demonstrated that central banks … can control inflation rather than a consequence of marked improvement in the professions understanding of how monetary …

We formulate the central bank’s problem of selecting an optimal long-run inflation rate as the choice of a distorting … equivalent to choosing inflation and nominal interest rates consistent with a resource constraint, and with an incentive … the optimum inflation rate is positive, because inflation reduces the value of the outside option for credit agents and …

expected inflation. The inability of the Fed to maintain a credible commitment to low interest rates in the face of increased … government spending and rising inflation led to the Fed-Treasury Accord of March 1951. Following the Accord, the external …

This paper argues that estimation of the Phillips curve for Japan should take account of the geographic dispersion of … labor-market conditions. We find evidence that the relationship between wage inflation and the unemployment rate is convex …. With such convexity, wage inflation can occur when unemployment rates across regions become more disperse, even if the …

actions of the Fed real shocks and inflation surprises is briefly considered. …