Our current inflation stemmed from a fiscal shock. The Fed is slow to react. Why? Will the Fed's slow reaction spur … more inflation? I write a simple model that encompasses the Fed's mild projections and its slow reaction, and traditional … views that inflation will surge without swift rate rises. The key question is whether expectations are forward looking or …

We analyze the impact of fiscal and monetary stimulus in an economy with mortgage debt, where inflation redistributes … inflation, increasing consumption demand and house prices. The power of fiscal stimulus grows when borrowers are more indebted …. We then show quantitatively that transfers followed by easy monetary policy cause a surge in inflation which helps …

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 …