Was the high inflation of the 1970s mostly due to incomplete information about the structure of the economy (an … unavoidable mistake as suggested by Orphanides, 2000)? Or, to weak reaction to expected inflation and/or excessive policy activism … overall empirical performance. We find that both explanations do a good job in accounting for the great inflation. Even with …

macroeconomic effects. This finding requires inflation expectations to adjust counterfactually large. When modeling inflation …

, in the sense that it understands and observes the process by which private sector inflation expectations are generated …; in the second, the central bank has to learn the private sector inflation forecasting rule. With imperfect knowledge … accommodates private sector inflation expectations) is no longer constant across the disinflation, but becomes state …

of expectations for output growth, inflation, and the policy rate. We show that a simple unobserved components model of …

yields' fluctuations and highlight the roles of a tight monetary policy stance and expectations of lower inflation in … negative inflation slope points to higher odds of a recession within a year. An aggressive removal of policy accommodation …