. Nevertheless, the price level is sticky in a range of markup indeterminacy, and inflation occurs only when employment presses … keep employment at a constrained optimum without inflation. Under uncertainty, negative aggregate demand shocks produce … demand will maximize employment, but at the cost of higher expected inflation …

The reduction in inflation that occurred in the early 1980s, when the Federal Reserve was headed by Paul Volcker, is … arguably the most widely discussed and visible macroeconomic event of the last 50 years of U.S. history. Inflation had been … rates as indicative of inflation expectations and of the credibility of their disinflationary policy. Drawing from the …

members also regarded long-term interest rates as key indicators of inflation expectations and of their disinflationary policy …

The paper begins by tracing the origins of the case for inflation targeting in postwar US monetary history. It … describes five aspects of inflation targeting practiced implicitly by the Greenspan Fed. It argues that (1) low long run … inflation should be an explicit priority for monetary policy, (2) as a practical matter it is not desirable for the Fed to vary …

inflation follow from an international acceptance of these ideas? And how did a consensus theoretical model develop in academia … model) reinforces key advances: the priority for price stability, the targeting of core rather than headline inflation, the … importance of credibility for low inflation, and preemptive interest rate policy supported by transparent objectives and …

own credibility for low inflation into being insufficiently preemptive in a business expansion. Then monetary policy can …

on a number of grounds which we evaluate in this paper. We show that observed inflation persistence in U.S. time series … is consistent with the absence of structural inflation stickiness as is the case in the benchmark NNS economy. We …