monetary policymaking. First, we discuss why trimmed means provide the best measure of core inflation. Second, we outline how … rigidities impede policymakers' ability to control inflation. And third, we describe how alternative shock/rigidity combinations … create inflation's grease (whereby it improves economic efficiency by speeding adjustment) and sand effects (whereby it …

In recent years, central bankers throughout the world have advocated that monetary policy shift toward inflation … targeting. Recent actions in the U.S. serve to highlight the desire of the Federal Reserve to keep inflation both low and stable …, while downplaying the likely output and employment consequences. But control of inflation requires both that one be able to …