The authors study the hypothesis that misperceptions of trend productivity growth during the onset of the productivity slowdown in the United States caused much of the great inflation of the 1970s. They use the general equilibrium, sticky price framework of Woodford (2002), augmented with...

Northwest Arkansas Convention Center, Rogers, Ark, June 4, 2008

Macroeconomics Advisers' Quarterly Outlook Meeting, St. Louis, June 11, 2008

We study the welfare cost of inflation in a general equilibrium life cycle model with growth, costly financial intermediation, and taxes on nominal quantities. We find a stationary equilibrium of the model matches a wide variety of facts about the postwar U.S. economy. We then calculate that the...

We study a simple, microfounded macroeconomic system in which the monetary authority employs a Taylor-type policy rule. We analyze situations in which the self-confirming equilibrium is unique and learnable according to Bullard and Mitra (2002). We explore the prospects for the use of ‘large...

Macroeconomics Advisers' Quarterly Outlook Meeting, St. Louis, June 11, 2008

Northwest Arkansas Convention Center, Rogers, Ark, June 4, 2008