price level. The analysis compares the properties of optimal policy in regimes ranging from pure inflation targeting (IT …), to a form of weighted-average inflation targeting (WAIT), to pure price level targeting (PLT). Strategies such as WAIT …

the Global Financial Crisis are modestly effective in speeding up the labor market recovery and return of inflation to 2 …

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 …

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 …

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 …

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 …

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 …