We consider three ways that a monetary policy framework may employ a range for inflation outcomes: (1) ranges that … acknowledge uncertainty about inflation outcomes (uncertainty ranges), (2) ranges that define the scope for intentional deviations … of inflation from its target (operational ranges), and (3) ranges over which monetary policy will not react to inflation …

inflation and deflationary biases in inflation expectations. In a model with an occasionally binding zero-lower-bound constraint …, we show that an inflation bias as well as a deflationary bias exist as a steady-state outcome. We assess the predictions … of this model using unique individual-level inflation expectations data across nine countries that allow for a direct …

Building on the results in Nalewaik (FEDS 2015-93), this work models wage growth and core PCE price inflation as regime … price inflation that becomes much larger after labor markets tighten beyond a certain point. The results are informative for … assessing the likelihood and risks of meeting certain inflation targets on a sustained basis …

Using daily inflation data from the Billion Prices Project [Cavallo and Rigobon (2016)], we show how temporal … private agents and the central bank (the “Fed information effect”). We find that the adverse response of daily inflation to … and an unobserved components model of inflation dynamics. To reconcile how one can obtain a sizable adverse response with …

Recently, the experience of the 1960s—when the U.S. inflation rate rose rapidly and persistently over a comparatively … short period—has been invoked as a cautionary tale for the present. An analysis of this period indicates that the inflation …

We consider what, if any, relationship there is between monetary aggregates and inflation, and whether there is any … paribus unitary relationship between inflation and money growth. Simulations of a New Keynesian model suggest that we should … allowance needed for the phase shift in the relationship between monetary growth rates and inflation. While financial innovation …

Since Kydland and Prescott (1977) and Barro and Gordon (1983), most studies of the problem of the inflation bias …-quadratic approach to the problem in favor of a projection method approach. We investigate the size of the inflation bias that arises in … a microfounded nonlinear environment with Calvo price setting. The inflation bias is found to lie between 1% and 6% for …

This paper studies the welfare consequences of exogenous variations in trend inflation in a New Keynesian economy …. Consumption and leisure respond asymmetrically to a rise and a decline in trend inflation. As a result, an increase in the … variance of shocks to the trend inflation process decreases welfare not only by increasing the volatilities of consumption and …

patterns in economic activity and inflation following oil price shocks in the euro area. In the 'normal regime', oil price … shocks are followed by sizeable and sustained macroeconomic fluctuations, with inflation and economic activity moving in the … same direction as the oil price. The responses of inflation expectations and wage growth point to second-round effects as a …

This paper decomposes consumer price inflation into pure inflation, relative price inflation, and idiosyncratic … inflation by estimating a dynamic factor model á la Reis and Watson (2010) on a data set of 146 monthly disaggregated prices … from 1995 to 2019. We find that pure inflation is the trend around which PCE price inflation fluctuates, while relative …