This paper shows that increased volatility of Örm-level productivity can push the nominal interest rate to its lower bound with large amplification effects on macroeconomic aggregates. The framework combines a simple canonical Önancial accelerator model, time varying risk shocks, and a zero...

The Phillips curve has been in the focus of many key debates in macroeconomics ever since Samuelson and Solow (1960) modified the original curve in linking the unemployment rate to the inflation rate. This essay analyzes the links of the modern discussion to the debates over time highlighting...

We explore the consequences of losing confidence in the price-stability objective of central banks by quantifying the inflation and deflationary biases in inflation expectations. In a model with an occasionally binding zero-lower-bound constraint, we show that an inflation bias as well as a...