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 …

This paper compares the role of stochastic volatility versus changes in monetary policy rules in accounting for the … time-varying volatility of U.S. aggregate data. Of special interest to us is understanding the sources of the great … build a medium-scale dynamic stochastic general equilibrium (DSGE) model with both stochastic volatility and parameter …

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 …

with current wage inflation of 6.5 percent - the highest level experienced in the past 40 years - and that firm-side slack … measures predict further increases in wage inflation over the coming year. Finally, we show that high levels of wage inflation … results suggest a very low likelihood that the Federal Reserve can reduce inflation without causing a significant slowdown in …

-order effect on their dynamics. The data favors a model with two unspanned volatility factors that capture uncertainty about … react in opposite directions to a shock to the real economy, and the response of inflation to uncertainty shocks vary across …

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 …

adamant about preventing a rise in inflation? The large fiscal imbalance brings about inflationary pressures, triggering a … spiral of higher inflation, output contraction, and further debt accumulation. A coordinated commitment to inflate away the …

industries. Meanwhile governments responded with unprecedented stimulus packages, and inflation increased to its highest values … in 40 years. In this paper I investigate the contribution of aggregate monetary and fiscal policies to inflation … heterogeneous supply curves, industry-specific shocks to inelastically supplied goods increase aggregate inflation through a cost …

, 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 …