Some analysts have argued that indexed bonds convey important information for the formulation of monetary policy. This article investigates whether a market measure of expected inflation derived from British indexed gilt prices would be useful in predicting future inflation and real economic...

This paper analyzes the U.S. congressional proposal to instruct the Federal Reserve to, in the next five years, lower inflation to zero from its current rate of around 5 percent. The paper concludes that, when other policy options are considered, the zero inflation policy is not advisable. Its...

Economists and policymakers disagree on the lengths central banks should go in pursuit of price stability and, in fact, on exactly what price stability means. This essay advocates that central banks try to maintain stable price levels in their countries, and it argues that the benefits of...

This essay distills the differences between zero inflation proponents and critics to three main questions: Can the central bank make a credible commitment to maintaining a stable price level? Should monetary policy be used to reduce the tax on capital income? And would reducing uncertainty about...

Many traditional macroeconomic models do not have determinate predictions for the path of inflation: even for a given specification of money supplies, many paths of inflation are consistent with equilibrium. According to the fiscal theory of the price level, fiscal policy can be used to select...

This study evaluates the conventional wisdom that modern Phillips curve-based models are useful tools for forecasting inflation. These models are based on the non-accelerating inflation rate of unemployment (the NAIRU). The study compares the accuracy, over the last 15 years, of three sets of...

This article estimates the benefits of reducing U.S. inflation below its current level when the government simultaneously raises another distortionary tax. Other researchers have suggested that reducing inflation would have fairly large benefits—from 1 to 3 percent of gross domestic product....

In the last forty years, inflation in the service sector has consistently exceeded inflation in the rest of the economy. This article investigates whether the observed difference in inflation rates reflects upward bias in the measurement of service prices.

This article surveys a variety of indexes used to measure inflation. The authors identify differences in the construction and coverage of these measures and touch on some of the issues affecting the measurement of prices for a broad range of goods and services.