The recent run-ups in oil and other commodity prices and their implications for inflation and monetary policy have grabbed the attention of many commentators in the media. Clearly, higher prices of food and energy end up in the broadest measures of consumer price inflation, such as the Consumer...

Remarks at the Barclays 16th Annual Global Inflation-Linked Conference, New York City.

Remarks at the Barclays 16th Annual Global Inflation-Linked Conference, New York City.

The author surveys some problems in measuring inflation and examines the likely costs of anticipated and unanticipated inflation as well as the short-run costs of reducing inflation. He looks at the possibility that an inflationary bias may be implicit in the political economy aspects of the...

An argument that the central bank should adopt a policy of price stability based on an explicit objective for the Consumer Price Index, which the Cleveland Fed President believes would provide a nominal anchor for the dollar as well as a clear standard by which to measure the success of monetary...

The large swings in world food prices in recent years renew interest in the question of how monetary policy in small open economies should react to such imported price shocks. We examine this issue in a canonical open economy setting with sticky prices and where food plays a distinctive role in...

Applying commonly used vector autoregression (VAR) techniques, this paper investigates the transmission mechanism of monetary policy on output and prices for Mauritius, using data for 1999-2009. The results show that (i) an unexpected monetary policy tightening-an increase in the Bank of...

A familiar old saw about the conduct of monetary policy is that it's like trying to drive a car while looking only in the rearview mirror. The idea is that policymakers are trying to steer a course that will keep the economy close to full employment with low, stable inflation, while their only...

Given the frequency of price changes, the real effects of a monetary shock are smaller if adjusting firms are disproportionately likely to be ones with prices set before the shock. This selection effect is important in a large class of sticky-price models with time-dependent price adjustment. We...