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 … endogenous investment as well as explicit, exogenous growth in productivity and the labor input. They assume the monetary …

stability under adaptive learning for interest rate rules that respond to inflation measures differing in their degree of price … stickiness. We find that rules responding to headline inflation measures that assign a positive weight to the inflation of the … the inflation of the sector with high price stickiness. By this we mean that they are more prone to induce non …