Economists have been arguing about the connection between unemployment and infl ation for decades. Critics claim that the connection is unreliable and leads policymakers astray, while others argue that the relationship is useful for forecasting. We examine the more direct connections between...

An explanation of why, in the face of a booming economy, low unemployment, and scant inflation pressures, the Federal Reserve must continue its campaign to achieve price stability.

An argument that adopting specific inflation targets as a way of achieving price stability would enhance the United States' economic performance.

Compares two possible explanations of why pay increases continue to be moderate in a vigorous labor market--workers' uncertainty about their jobs and human resource managers' wage-setting behavior--and looks at how each explanation matches the evidence on the timing of inflation and wage changes.