We study the relation between inflation and real activity over the business cycle. We employ a Trend-Cycle VAR model to … control for low-frequency movements in inflation, unemployment, and growth that are pervasive in the post-WWII period. We show … that cyclical fluctuations of inflation are related to cyclical movements in real activity and unemployment, in line with …

inflation strongly and persistently, (ii) lead to statistically weak negative effects on activity, (iii) contributed to … having a stronger effect on inflation expectations. Quantitatively, increasing political pressure by half as much as Nixon …

difference by showing that, although the pass-through of marginal cost into inflation is substantial, the elasticity of marginal … inflation …

The US and other advanced countries suffered bursts of severe inflation in 2021 and the first half of 2022, followed by … declines of inflation later in 2022, in some countries. In times of high volatility of price determinants--cost and … productivity--inflation can jump upward and fall downward at high speed, contrary to the uniformly sticky behavior associated with …

We show that, in a broad class of menu cost models, the dynamics of aggregate inflation in response to arbitrary shocks …

explaining bouts of inflation. We begin by showing that a quasi-flat Phillips curve, which was popular prior to the pandemic …, still fits the post-2020 US data well and that changes in short term inflation expectations induced by supply shocks likely … played a major role in the recent inflation episode. We then document features of the joint dynamics of inflation and …

variables may be fractionally integrated and the predictive relation may feature cointegration, we provide sup-Wald break tests …

. The model delivers a static wage Phillips curve linking current wage inflation to current unemployment. For standard … stickiness, which features a forward-looking wage Phillips curve, linking current wage inflation to future expected wage … inflation and current unemployment. This result puts in perspective the role played by the forward-looking component of the new …

inflation behaves as if prices are nearly fully sticky (flexible). Using (conventional) measures of inflation that understate …