We offer a comprehensive evaluation of the welfare and cyclical implications of moderate trend inflation. In an … extended version of a medium-scale New Keynesian model, recent proposals to increase trend inflation from 2 to 4 percent would …, and iv) and the interaction between trend inflation and shocks to the marginal efficiency of investment (MEI), insofar …

U.S. inflation has recently surged, with inflation reaching its highest readings since the early 1980s. We examine the … drivers of this rise in inflation, focusing on supply chain disruptions, labor supply constraints, and their interaction … endogenous markups, we find that supply chain disruptions combined with a rise in the disutility of work raised inflation by …

sectoral recession. It also accounts for inflation, including the sharp runup in 2021 …

appointment of Volcker marked a change in the conduct of monetary policy, but inflation dropped only when fiscal policy … accommodated this change two years later. In fact, a disinflationary attempt of the monetary authority leads to more inflation if … been confident about the switch, the Great Inflation would not have occurred and debt would have been higher. This is …

with a modest and protracted decline in inflation, following the rise in financial stress in 2008Q4. The model does so even … though inflation remains very dependent on the evolution of economic activity and of monetary policy …

Amidst the recent resurgence of inflation, this paper investigates the interplay of corporate profits and income … distribution in shaping inflation and aggregate demand within the New Keynesian framework. We derive a novel analytical condition …-demand fluctuations and inflation to be amplified by heterogeneity, profits have to be countercyclical--an implication that is at odds …

We derive closed-form solutions and sufficient statistics for inflation and GDP dynamics in multi-sector New Keynesian … of inflation and GDP responses to monetary and sectoral shocks and (2) increase the pass-through of sectoral shocks to … aggregate inflation. Quantitatively, we confirm the significant role of production networks in shock propagation, emphasizing …