The U.S. economy appears to have experienced a pronounced shift toward higher productivity over the last five years or so. We wish to understand the implications of such shifts for the structure of optimal monetary policy rules in simple dynamic economies. Accordingly, we begin with a standard...

Was the high inflation of the 1970s mostly due to incomplete information about the structure of the economy (an unavoidable mistake as suggested by Orphanides, 2000)? Or, to weak reaction to expected inflation and/or excessive policy activism that led to indeterminacies (a policy mistake, a...

The U.S. economy turned in an exceptional performance in 1999, combining strong real output growth with moderate inflation. Real GDP, a broad measure of the nation's output of goods and services, grew 4.6 percent from the fourth quarter of 1998 to the fourth quarter of 1999. Employment also rose...

Presentation to the Banque de France International Symposium on Globalisation, Inflation and Monetary Policy (Paris, France, March 7, 2008)

The authors examine the inflation take-off of the early 1970s in terms of the expectations trap hypothesis, according to which fear of violating the public’s inflation expectations pushed the Fed into producing high inflation. This interpretation is compared with the Phillips curve hypothesis,...

A massive structural budget deficit threatens the long-term economic health of the United States. But the fiscal imbalance won't necessarily fuel inflation as long as the Federal Reserve retains the independence to pursue its objectives of maximum sustainable employment and price stability. The...

Presentation to Town Hall Los Angeles, Los Angeles, CA, March 23, 2010

Presentation to Financial Executives International, San Francisco, CA, April 15, 2010