The FOMC and professional forecasters expect the Fed eventually to achieve its 2% inflation target. The market seems more skeptical.
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Category Archives: inflation
Guest Contribution: “Argentina: A Big Change with Problematic Initial Conditions”
Today, we are pleased to present a guest contribution written by Maria Muniagurria, faculty member in Economics at the University of Wisconsin – Madison.
A little over two months ago, Mauricio Macri began his tenure as president after his coalition of center-right parties prevailed over the ruling party’s candidate by a small margin.
Speaker Ryan Assesses Fiscal and Monetary Policy Efficacy
From The Hill:
Instead of crediting Obama for any of the economic gains that have occurred in the last seven years, Ryan argued that the Fed’s policies pushed the recovery. He added that the central bank’s controversial efforts to drive down borrowing costs may have driven growth, but the benefits failed to spread to everyone.
Guest Contribution: “Does legislating a rule for the Federal Reserve make sense?”
Today we are fortunate to have a guest contribution written by Carl E. Walsh, Distinguished Professor of Economics at the University of California, Santa Cruz.
Estimating Shock Dependent Exchange Rate Pass-Through
We propose a new focus: incorporating the underlying shocks that cause exchange rate fluctuations when evaluating how these fluctuations ‘pass through’ into import and consumer prices.
Potential GDP, Again
There are various ways of estimating potential output. I typically refer to the CBO’s estimates, which are basically a production function approach (use trend labor and capital stock, and total factor productivity growth, to infer potential output). However, An alternative is to examine price pressures to infer potential output, as in Ball and Mankiw (JEP, 2002).
“…inflation expectations can change quickly”
One of the arguments for acting sooner rather than later on monetary policy is that if the slack disappears, inflationary expectations will surge. That’s represented in this quote from reader Peak Trader’s comment. While I don’t rule out this possibility, it seems reasonable to me to empirically assess whether this is true for the United States over the past thirty years.
Measuring unemployment
New claims for unemployment insurance this week came in at the lowest level in over 40 years. How much slack can there be left in the labor market?
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Guest Contribution: “Inflation Expectations Spur Consumption Expenditure”
Today we are fortunate to have a guest contribution by Michael Weber, assistant professor at the University of Chicago’s Booth School of Business. This post is based upon a paper, co-authored with Francesco D’Acunto and Daniel Hoang.
Hitting the Fed’s targets
The economy has steadily been moving closer to the Fed’s long-run objectives. But we’re still not there yet.
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