Recently a market in options based on CPI inflation (inflation caps and floors) has emerged in the US. This paper uses … quotes on these derivatives to construct probability densities for inflation. We study how these pdfs respond to news … empirical pricing kernels. The options-implied densities assign considerably more mass to extreme inflation outcomes (either …

focuses solely on stabilizing nominal wage inflation. Furthermore, this simple wage stabilization rule is remarkably robust to …

In the United States, the rate of price inflation falls in recessions. Turning this observation into a useful inflation … forecasting equation is difficult because of multiple sources of time variation in the inflation process, including changes in Fed … policy and credibility. We propose a tightly parameterized model in which the deviation of inflation from a stochastic trend …

Official price indexes, such as the CPI, are imperfect indicators of inflation calculated using ad hoc price formulae … different from the theoretically well-founded inflation indexes favored by economists. This paper provides the first estimate of … how accurately the CPI informs us about "true" inflation. We use the largest price and quantity dataset ever employed in …

nominal interest rates and inflationary expectations below target). In addition, the recovery was jobless (i.e., output growth …

of this margin of adjustment for the response of inflation to shocks. Across a range of empirical exercises, we find …

shortening the duration of the crisis and a binding zero bound. Inflation should be front loaded. Fiscal-policy multipliers can …

for output growth and inflation from 1992 to 2011. We find strong evidence of time variation in the pool's weights …

-lower bound. Rules that respond to the level or change in the output gap can perform poorly under those conditions. …