aggregate demand gains momentum. If inflation also has inertia, the central bank still overheats the economy during the low …

policy to U.S. inflation over the December 2019-June 2022 period. Model calibrations show that aggregate demand shocks … explain roughly two-thirds of total model-based inflation, and that the fiscal stimulus contributed half or more of the total …

do not force a central bank to tolerate higher inflation, but may generate a tradeoff between the central bank …'s objectives for inflation and real activity. The presence and size of this tradeoff depends on how flexible prices are in the …