The simultaneous decline of core inflation with the increase in the unemployment rate during the recession of 2007-09 has renewed debate about the use of economic slack, such as unemployment, for predicting inflation. Doh examines the relationship between cyclical fluctuations in inflation and...

This paper studies the time variation of the Federal Reserve’s inflation target between 1960 and 2004 using both macro and yield curve data. I estimate a New Keynesian dynamic stochastic general equilibrium model in which the inflation target follows a random-walk process. I compare estimation...

The concept of trend inflation is important in making accurate inflation forecasts. However, there is little consensus on how the trend in inflation should be modeled. While some studies suggest a survey-based measure of long-run inflation expectations as a good empirical proxy for trend...