This paper examines inflation dynamics in the United States since 1960, with a particular focus on the Great Recession …. A puzzle emerges when Phillips curves estimated over 1960-2007 are used to predict inflation over 2008-2010: inflation … by theories of costly price adjustment: we measure core inflation with the median CPI inflation rate, and we allow the …

-form solution for a long-run Phillips curve which relates average output gap to average wage inflation: it is virtually vertical at … high inflation and flattens at low inflation. Macroeconomic volatility shifts the curve outward and reduces output. The … results imply that stabilization policies play an important role, and that optimal inflation may be positive and differ across …

The paper provides an integrated analysis of globalization effects on the inflation-output tradeoff and monetary policy … flatten the Phillips curve, the tradeoff between inflation and activity. Second, the same globalization forces lead the … welfare-based monetary policy to be more aggressive with regard to inflation fluctuations, and at the same time, more benign …

inflation and activity. If policy makers are guided by the welfare criterion of the representative household, globalization … forces also lead monetary policy to be more aggressive with regard to inflation fluctuations but, at the same time, more …

Sticky-price models with rational expectations fail to capture the inertia in U.S. inflation. Models with backward …-looking expectations capture current inflation behavior, but are unlikely to fit other monetary regimes. This paper seeks to overcome these … problems with a near-rational model of expectations. In the model, agents make univariate forecasts of inflation: they use …

This paper shows that inflation has depended strongly on the growth rate of output for most of the twentieth century …

This paper examines the shift in the relation between the inflation rate and the rate of growth of real output which … possible lines of explanation: a) the new classical view of the output-inflation tradeoff, initially specified by Lucas;b) the … effect of supply-side shocks, such as energy prices; c) the effect of inflation variability on the natural rate of real …

-recession trend, suggesting hysteresis. Second, while inflation has decreased, it has decreased less than anticipated, suggesting a … breakdown of the relation between inflation and activity. To examine the first, we look at 122 recessions over the past 50 years … unemployment on inflation, for given expected inflation, decreased until the early 1990s, but has remained roughly stable since …

ideas. The coroner's evidence consists of the small standard deviation of the core inflation rate in the past two decades … despite substantial volatility of the unemployment rate, and in particular the common tendency of PC inflation equations to … predict ever greater amounts of negative inflation (i.e., deflation) over the years of labor-market slack since 2008 …