Estimating the welfare gains from ending inflation requires taking a stand on the shape of the money demand function. A form of the money demand function that seems to describe U.S. experience - known in technical jargon as the double log form - seems to work well in countries and times where...

In this article, James B. Bullard and Alvin L. Marty begin by summarizing some popular arguments for positive steady-state rates of inflation based on the idea that a certain amount of inflation stabilizes economic performance. Then, synthesizing a number of disparate results in a single...

In order to maintain its credibility, however, the FOMC will have to take actions consistent with achieving its stated inflation objective.

Policymakers should not think of price stability and economic stability as competing objectives but as complements - the best way to achieve the latter is to be firmly committed to achieving the former.

The sale of typical securities would force the Fed to contract its lending programs, whereas the sale of Fed bills would not.

The effect of QE2 on interest rates could be small and limited to an announcement effect.

Neither core nor headline inflation measures can consistently and reliably predict medium-term inflation well enough to be of much use to policymakers.>