Has US inflation really become harder to forecast?

Why Has U.S. Inflation Become Harder to Forecast?

We examine whether the U.S. rate of price inflation has become harder to forecast and, to the extent that it has, what changes in the inflation process have made it so. The main finding is that the univariate inflation process is well described by an unobserved component trend-cycle model with stochastic volatility or, equivalently, an integrated moving average process with time-varying paramet...

Has the UK really become iodine sufficient?

What Has Become of the "Stability-Through- Inflation" Argument?

The purpose of this article is to examine the status of a well known argument for a positive rate of steady state inflation. The original argument, by Vickrey (1954) and Phelps (1972), suggests that the economy is more able to dampen shocks, such as fluctuations in the real rate of return on risky capital investment, when inflation rates are positive. The notion is that the conditions required ...

Strong Employment, Low Inflation: How Has the US Economy Done

Cet article passe en revue les nouvelles économiques favorables aux États-Unis durant les années 90, caractérisées par une croissance économique continue avec un faible taux de chômage et une faible inflation. Cet échange chômage-inflation favorable a été rendue possible, en partie, par de nombreux facteurs qui ont gardé l’inflation des prix faible. De plus, de nombreux changements dans le marc...

Inflation forecast contracts

We introduce a new type of incentive contract for central bankers: inflation forecast contracts, which make central bankers' remunerations contingent on the precision of their inflation forecasts. We show that such contracts enable central bankers to influence inflation expectations more effectively, thus facilitating more successful stabilization of current inflation. Inflation forecast contra...