The fiscal theory states that inflation adjusts so that the real value of government debt equals the present value of … determines the path of expected inflation, while news about the present value of surpluses drives unexpected inflation. I use … fiscal theory to interpret historical episodes, including the rise and fall of inflation in the 1970s and 1980s, the long …

To what extent is the recent spike in inflation driven by a change in its permanent component? We estimate a semi …-structural model of output, inflation, and the nominal interest rate in the United States over the period 1900-2021. The model predicts … that between 2019 and 2021 the permanent component of inflation rose by 51 basis points. If instead we estimate the model …

This paper studies the relationship between inflation, output, money and interest rates in the euro area, using data … power for future inflation. The real money gap contains more information about future inflation than the output gap and the … Eurosystem's money-growth indicator is an inferior indicator of future inflation …

successful at describing the history of U.S. inflation. Motivated by these observations, I ask: Can we understand the history of … U.S. inflation using a framework that ignores monetary frictions? The fiscal theory of the price level allows us to … history of U.S. inflation with a fiscal-theory, frictionless view. I show how the fiscal theory can accommodate the stylized …

This essay asks how high inflation arises and why it is costly to eliminate. Specifically, the paper discusses the … roles of price rigidity and credibility problems in explaining the costs of disinflation; the puzzle of persistent inflation … triggered by onetime macroeconomic shocks; and the case for returning to adaptive expectations in theories of inflation …

may operate in harmony or against demand and the net effect is what we call the "basic inflation." Contrary to a …-priori notions of positive association between inflation rates and profit rates, our theory proposes a critical test of a negative … total inflation. These pressures would be present even if no increase in cost occurs. This suggests that an important cause …

What is the effect of higher expectations of future inflation on current inflation? I compute this passthrough for a … most, expectations of long-run inflation are completely irrelevant; (v) I provide a generalized Phillips curve for current … inflation as a linear function of expectations of future inflation and realized past inflations; (vi) I show that the sum of all …

, consistent with the evidence, increases with inflation. Because we assume that firms sell multiple products and choose how many … inflation accelerator--a feedback loop between inflation and the fraction of price changes--which significantly increases the … slope of the Phillips curve during periods of high inflation. Applied to the U.S. time series, our model predicts that the …

This paper isolates the role of conflict or disagreement on inflation in two ways. In the first part of the paper, we … present a stylized model, kept purposefully away from traditional macro models. Inflation arises despite the complete absence … of money, credit, interest rates, production, and employment. Inflation is due to conflict; it cannot be explained by …

constraints, and shocks to them, shape inflation. We show that binding constraints for domestic and foreign producers shift … recent US data, we find that binding constraints explain half of the increase in inflation during 2021-2022. In particular …, tight capacity served to amplify the impact of loose monetary policy in 2021, fueling the inflation takeoff …