find that (i) the US economy is well described by a number of structural shocks between two and five. Focusing on the four-shock … prevails for GDP, while demand prevails for employment and inflation. (ii) Monetary and fiscal policy shocks have sizable …

positive at the onset of the episode, through promising higher inflation rates in future periods. We embed our theory into a … commiting to keep interest rates low at the exit of the liquidity trap, to stabilize inflation today. 2. From debt … consolidated budget) monetary policy becomes subservient to fiscal policy, giving rise to more volatile inflation, output and …

a shock in the Federal Funds Rate, following the baseline and variations of the Vector Autoregression (VAR) models in …

combined with the theory of optimum currency areas. It shows how since the turn of the millennium a too expansionary monetary …

Our current inflation stemmed from a fiscal shock. The Fed is slow to react. Why? Will the Fed's slow reaction spur … high real interest rates. Price stickiness means inflation will persist past an initial shock. To reduce inflation, fiscal … more inflation? I write a simple model that encompasses the Fed's mild projections and its slow reaction, and traditional …

Our current inflation stemmed from a fiscal shock. The Fed is slow to react. Why? Will the Fed's slow reaction spur … high real interest rates. Price stickiness means inflation will persist past an initial shock. To reduce inflation, fiscal … more inflation? I write a simple model that encompasses the Fed's mild projections and its slow reaction, and traditional …

positive at the onset of the episode, through promising higher inflation rates in future periods. We embed our theory into a … commiting to keep interest rates low at the exit of the liquidity trap, to stabilize inflation today. 2. From debt … consolidated budget) monetary policy becomes subservient to fiscal policy, giving rise to more volatile inflation, output and …

We develop a theoretical framework to account for the observed instability of the link between inflation and fiscal … bank that has full control over inflation. When policy makers deviate from this Virtuous regime, agents conduct Bayesian … pessimistic about a prompt return to the Virtuous regime and inflation starts drifting in response to a fiscal imbalance. Shocks …