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 …

This paper investigates the macroeconomic risks associated with undesirably low inflation using a medium-sized New … Keynesian model. We consider different causes of persistently low inflation, including a downward shift in long-run inflation … persistently low inflation depend crucially on its underlying cause, as well as on the extent to which monetary policy is …