A discussion of six papers presented at the Federal Reserve Bank of Cleveland's Conference on Price Stability in November 1990, focusing on how recent developments in macroeconomic research have changed perceptions about optimal inflation policy.

An argument that attempting to alleviate the burden of unemployment on the less affluent through expansionary monetary policy may hurt the clientele it is supposed to serve if, ultimately, the policy leads to higher long-run rates of inflation.

This paper analyzes the U.S. congressional proposal to instruct the Federal Reserve to, in the next five years, lower inflation to zero from its current rate of around 5 percent. The paper concludes that, when other policy options are considered, the zero inflation policy is not advisable. Its...

Economists and policymakers disagree on the lengths central banks should go in pursuit of price stability and, in fact, on exactly what price stability means. This essay advocates that central banks try to maintain stable price levels in their countries, and it argues that the benefits of...

This essay distills the differences between zero inflation proponents and critics to three main questions: Can the central bank make a credible commitment to maintaining a stable price level? Should monetary policy be used to reduce the tax on capital income? And would reducing uncertainty about...

Many traditional macroeconomic models do not have determinate predictions for the path of inflation: even for a given specification of money supplies, many paths of inflation are consistent with equilibrium. According to the fiscal theory of the price level, fiscal policy can be used to select...

This study evaluates the conventional wisdom that modern Phillips curve-based models are useful tools for forecasting inflation. These models are based on the non-accelerating inflation rate of unemployment (the NAIRU). The study compares the accuracy, over the last 15 years, of three sets of...

This article estimates the benefits of reducing U.S. inflation below its current level when the government simultaneously raises another distortionary tax. Other researchers have suggested that reducing inflation would have fairly large benefits—from 1 to 3 percent of gross domestic product....

Maintaining stables prices and keeping inflation in check have become key policy objectives of the Federal Reserve and other central banks. Evidence indicates that inflation has become less persistent and volatile since the early 1980s. Although economists have examined the implications for...