stimulus mostly generates inflation rather than output growth. To do this, I construct price-setting models with "volatility …Is monetary policy less effective at increasing real output during periods of high volatility than during normal times …? In this paper, I argue that greater volatility leads to an increase in aggregate price flexibility so that nominal …

inflation is inertial. Microeconomic data indicate that firms change prices frequently. We formulate and estimate a model which … resolves this apparent micro - macro conflict. Our model is consistent with post-war U.S. evidence on inflation inertia even …

activity and inflation as latent variables. We incorporate these latent variables into a factor-augmented vector autoregression … activity and inflation, consistent with previous studies. In contrast to much of the literature, however, we find that central …-bank-determined changes in Chinese interest rates also have substantial impacts on economic activity and inflation, while other measures of …

, and show that it has significant explanatory power for the evolution of macroeconomic volatility. We define "fundamental …" volatility as the volatility that would arise from an economy made entirely of idiosyncratic microeconomic shocks, occurring … different sectors vary over time (in a way we directly measure), while the volatility of those sectors remains constant. We find …

volatility literature, namely its relative neglect of the connection between macroeconomic fundamentals and asset return … volatility. We progress by analyzing a broad international cross section of stock markets covering approximately forty countries …

shocks using methods from the news shocks literature, the analysis finds that innovations in realized stock market volatility … economy. Moreover, investors have historically paid large premia to hedge shocks to realized but not implied volatility. A … model in which fundamental shocks are skewed left can match those facts. Aggregate volatility matters, but it is the …

role for credit growth (beyond its role in constructing the inflation forecast) would reduce the volatility of output and …Historical data and model simulations support the following conclusion. Inflation is low during stock market booms, so … that an interest rate rule that is too narrowly focused on inflation destabilizes asset markets and the broader economy …

choices matter for output volatility and the medium-term level of inflation. Greater monetary independence is associated with … inflation rate. We find that trilemma policy configurations and external finances affect output volatility through the … lower output volatility while greater exchange rate stability implies greater output volatility, which can be mitigated if a …