The long-run relation between growth and inflation has not yet been studied in the context of nominal price and wage … integrate staggered price- and wage-setting into an endogenous growth framework. In this setting, growth and inflation are … linked via the incentive to innovate. For standard calibrations, the linkage is strong: as trend inflation shifts from -5 to …

A large literature has established that the Fed's change from a passive to an active policy response to inflation led … to U.S. macroeconomic stability after the Great Inflation of the 1970s. This paper revisits the literature's view by … confirm the literature's view. Our estimated model shows an active policy response to inflation even during the Great …

an active response to inflation led to U.S. macro-economic stability after the Great Inflation of the 1970s. We revisit … this view by estimating a staggered price model with trend inflation using a Bayesian method that allows for equilibrium … demonstrates an active response to inflation even in the Great Inflation era, during which the U.S. economy was likely in the …

We combine an estimated monetary policy rule featuring time-varying trend inflation and stochastic coefficients with a … medium scale New Keynesian framework calibrated on the U.S. economy. We find the impact of variations in trend inflation on … counterfactual exercises suggest that the change in the Federal Reserve's policy response to inflation is likely to have been the …