Understanding Inflation and the Implications for Monetary Policy

by Fuhrer, Jeff; Kodrzycki, Yolanda K.; Little, Jane Sneddon; Olivei, Giovanni P.; Samuelson, Paul A.

• ISBN13: 9780262013635
• ISBN10: 0262013630
• Format: Hardcover
• Copyright: 2009-10-30
• Publisher: Mit Pr

Summary

In 1958, economist A. W. Phillips published an article describing what he observed to be the inverse relationship between inflation and unemployment; subsequently, the "Phillips curve" became a central concept in macroeconomic analysis and policymaking. But today's Phillips curve is not the same as the original one from fifty years ago; the economy, our understanding of price setting behavior, the determinants of inflation, and the role of monetary policy have evolved significantly since then. In this book, some of the top economists working today reexamine the theoretical and empirical validity of the Phillips curve in its more recent specifications. The contributors consider such questions as what economists have learned about price and wage setting and inflation expectations that would improve the way we use and formulate the Phillips curve, what the Phillips curve approach can teach us about inflation dynamics, and how these lessons can be applied to improving the conduct of monetary policy. Contributors: Lawrence Ball, Ben Bernanke, Oliver Blanchard, V. V. Chari, William T. Dickens, Stanley Fischer, Jeff Fuhrer, Jordi Gali, Michael T. Kiley, Robert G. King, Donald L. Kohn, Yolanda K. Kodrzycki, Jane Sneddon Little, Bartisz Mackowiak, N. Gregory Mankiw, Virgiliu Midrigan, Giovanni P. Olivei, Athanasios Orphanides, Adrian R. Pagan, Christopher A. Pissarides, Lucrezia Reichlin, Paul A. Samuelson, Christopher A. Sims, Frank R. Smets, Robert M. Solow, Jurgen Stark, James H. Stock, Lars E. O. Svensson, John B. Taylor, Mark W. Watson

Table of Contents

Acknowledgments	p. ix
Foreword	p. xi
The Phillips Curve in Historical Context	p. 1
Fifty Years of the Phillips Curve	p. 69
A Dialog on What We Have Learned
Forecasting Inflation	p. 99
Phillips Curve Inflation Forecasts	p. 101
Comments	p. 187
Comments	p. 195
The Labor Market and the Phillips Curve	p. 205
A New Method for Estimating Time Variation in the NAIRU	p. 207
Comments	p. 231
Comments	p. 237
Inflation Expectations	p. 245
Inflation Expectations, Uncertainty, the Phillips Curve, and Monetary Policy	p. 247
Comments	p. 267
Comments	p. 281
Evidence on Price Determination	p. 289
Implications of Microeconomic Price Data for Macroeconomic Models	p. 291
Comments	p. 333
Comments	p. 351
Is the Phillips Curve Vertical in the Long Run?	p. 359
Hysteresis in Unemployment	p. 361
Comments	p. 383
Comments	p. 395
Lessons for Central Bankers: A Panel Discussion	p. 401
Israeli Monetary Policy and the Phillips Curve	p. 403
Lessons for Central Bankers from a Phillips Curve Framework	p. 415
The Phillips Curve and the European Central Bank	p. 427
Monetary Policy at the Riksbank and the Phillips Curve	p. 433
The Phillips Curve Going Forward	p. 445
What We Still Need to Learn
Outstanding Issues in the Analysis of Inflation	p. 447
Contributors	p. 457
Author Index	p. 473
Subject Index	p. 481
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