Forecasts of the rate of price inflation play a central role in the formulation of monetary policy, and forecasting … inflation is a key job for economists at the Federal Reserve Board. This paper examines whether this job has become harder and …, to the extent that it has, what changes in the inflation process have made it so. The main finding is that the univariate …

A key policy question is: How high an inflation rate should central banks target? This depends crucially on the costs … of inflation. An important concern is that high inflation will lead to inefficient price dispersion. Workhorse New … Keynesian models imply that this cost of inflation is very large. An increase in steady state inflation from 0% to 10% yields a …

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 …

inflation, with emphasis on the role of oil shocks and accommodative monetary policy. The model features oil as a complementary … VAR. We then show that our model does a good job of explaining unemployment and inflation since 2010, including the recent … inflation surge that began in mid 2021. We show that mainly accounting for this surge was a combination oil price shocks and …

.S. headline inflation rate. This paper compares alternative approaches to filtering out the transitory effects of these industry … price changes and measuring the underlying or core level of inflation over 2020-2021. The Federal Reserve's preferred … measure of core, the inflation rate excluding food and energy prices, has performed poorly: over most of 2020-21, it is almost …

Several academics and practitioners have pointed out that inflation follows a seemingly exogenous statistical process … of deviations of inflation from its target and output from its potential), subject to a Phillips curve, a central bank … will seek to increase inflation when output is below potential. This targeting rule will impart a negative correlation …

.S. government. We use our estimates to account for contributions to the evolution of the debt to GDP ratio made by inflation, growth …

facts: (1) Macroeconomic shocks explain only about 15% of sectoral inflation fluctuations; (2) The persistence of sectoral … inflation is driven by macroeconomic factors; (3) While disaggregated prices respond quickly to sector-specific shocks, their …

In a model of memory and selective recall, household inflation expectations remain rigid when inflation is anchored but … exhibit sharp instability during inflation surges, as similarity prompts retrieval of forgotten high-inflation experiences … that similarity can quantitatively account for the sharp post-pandemic rise in inflation expectations, particularly among …