This paper examines the importance of monetary disturbances for cyclical fluctuations in real activity and inflation … inflation cycles in all G-7 countries; that they are the dominant source of fluctuations in three of the seven countries; that …

.S. inflation and output volatility. The principal finding is that monetary policy played a substantial role in reducing inflation … volatility to smaller TFP shocks. We also investigate the pattern of output and inflation volatility under an optimal monetary … policy counterfactual. We find that real output volatility would have been somewhat lower, and inflation volatility …

model does a good job of accounting for the joint behavior of labor and goods markets, as well as inflation, during the … capital played critical roles in accounting for the small size of the drop in inflation that occurred during the Great …

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 …

-run inflation-unemployment tradeoff. Two conflicting motives drive policy. In the static version of the model, uncertainty provides … aggressive than a policy that disregards parameter uncertainty. Exceptions occur when uncertainty is very high and inflation …

change that renders the natural rates of interest and unemployment uncertain. Using a forward-looking quarterly model of the … interest rate is raised or lowered from its existing level in response to inflation and changes in economic activity. These … rules do not require knowledge of the natural rates of interest or unemployment for setting policy and are consequently …