In recent years, we have not seen much of a negative correlation between inflation, the time series plotted in figure 1, and measures of resource slack, based on real GDP plotted in figure 2. This flattening of the Phillips curve in many countries across the world has startled monetary policymakers. ...

To gauge inflationary pressures, policymakers generally pay close attention to labor cost developments. A key reason has been the widely held view that labor cost inflation (i.e., wage inflation adjusted for productivity developments) is one of the main causes of price inflation. From a theoretical ...

Around the world, most central banks set policy by committee. This is motivated in part by the idea that groups reach better decisions than individuals and in part by a desire for representation of different geographical areas and economic...

This paper surveys and modestly extends the theory of menu-cost models of the behavior of the aggregate price level after large-cost shocks. It does so in the context of an economy with a high underlying rate of inflation. It concentrates on the effect of large permanent and unexpected increases ...

Chile offers an example of a country that has overcome the fear of floating by reducing balance-sheet mismatches; enhancing financial-market development; and improving monetary, fiscal, and political institutions; while strengthening policy credibility. Under the floating regime, Chile’s economic ...