Previous studies of disinflation work with models in which firms use time- dependent strategies, changing nominal prices at intervals of fixed length. These models may be criticized for failing to allow pricing behavior to adjust after a large shift in policy regime. Consequently, this paper...

A simple model of the price level illustrates how Milton Friedman's k-percent monetary policy rule provides for price stability. His rule can, in particular, largely eliminate the problem of long-run price-level uncertainty emphasized by Irving Fisher

This paper characterizes optimal monetary policy in the context of a general equilibrium model with optimizing agents and staggered price setting. Starting from a steady state with positive inflation, a rapid disinflation is desirable when announcements of future monetary policy are fully...

A contemporary extension of Irving Fisher's theory of interest identifies three determinants of long-term nominal bond yields: long-term real interest rates, risk premia, and long-term inflationary expectations. Empirically, however, the long-term real rate is quite stable and the risk premium...