Our current inflation stemmed from a fiscal shock. The Fed is slow to react. Why? Will the Fed's slow reaction spur … more inflation? I write a simple model that encompasses the Fed's mild projections and its slow reaction, and traditional … views that inflation will surge without swift rate rises. The key question is whether expectations are forward looking or …

We analyze the impact of fiscal and monetary stimulus in an economy with mortgage debt, where inflation redistributes … inflation, increasing consumption demand and house prices. The power of fiscal stimulus grows when borrowers are more indebted …. We then show quantitatively that transfers followed by easy monetary policy cause a surge in inflation which helps …

A parsimonious model of shifting policy regimes can simultaneously capture expected and actual US inflation during 1969 …. Private sector learning about policymaker type leads to a reputation state variable. We use model inflation forecasting rules … to extract state variables from SPF inflation forecasts. US inflation is tracked by optimal policy without commitment …

Unemployment is low and inflation is falling, but consumer sentiment remains depressed. This has confounded economists … official inflation are strongly correlated with borrowing costs and consumer credit supply. Concerns over borrowing costs … alternative measures of inflation that include borrowing costs and can account for almost three quarters of the gap in US consumer …

To what extent is the recent spike in inflation driven by a change in its permanent component? We estimate a semi …-structural model of output, inflation, and the nominal interest rate in the United States over the period 1900-2021. The model predicts … that between 2019 and 2021 the permanent component of inflation rose by 51 basis points. If instead we estimate the model …

Why do some attempts at disinflation lead to substantial reductions in inflation while others do not? We investigate … that a fundamental determinant of success in reducing inflation was the strength of the Federal Reserve's commitment to … disinflation at the start of its attempts. In episodes where its commitment was high, there were significant declines in inflation …

We provide theory and evidence that relative price shocks can cause aggregate inflation and act as aggregate supply … on U.S. core inflation while depressing U.S. real activity. In a two-sector monetary model with upstream and downstream … predictions. Motivated by post-COVID inflation in the U.S., a model experiment shows that a one-time relative price shock …

goods and find that the 1990s are not puzzling in light of this new theory. There is compelling micro and macro evidence for … our extension, and the predictions of the theory are in conformity with U.S. national products, incomes, and capital gains …. We use the theory to compare current accounting measures for labor productivity and investment with the corresponding …