Inflation and Consumer Welfare: Don’t Forget the Supply Side!
“Let’s keep our eye on the supply side. We should be making every effort, policy-wise, to ease restrictions on production and exchange. That will help both in the short run and the long run.” ~ Alexander W. Salter
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Assessing Market Expectations of Inflation
“Those denying any risk that inflation will remain above target or confidently predicting that 4 percent inflation will be the new normal, are not within the range of reasonable. They are rightly ridiculed.” ~ William J. Luther
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Is Larry Summers Channeling Benjamin Anderson?
“The post-2008 framework has incentivized the destabilization of monetary policy. The sooner we recognize this fact, the sooner we can seriously discuss a solution to the problem.” ~ James L. Caton
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Is Inflation Above the Fed’s Target?
“A credible Fed would anchor expectations to its target growth path. Unfortunately, the Fed has not been credible in the past. That leaves us with a much more difficult question today: what should the Fed do when it hasn’t done what it should have done?” ~ William J. Luther
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The Federal Reserve Is Not Credible
“Having persistently undershot its inflation target for nearly a decade, the Fed now looks poised to err in the opposite direction.” ~ William J. Luther
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Permanent or Transitory Inflation: An Analytical Framework
“Inflation is not a high price level; it is a persistent increase in the price level. Whether inflation persists depends on what Fed officials do next.” ~ Nicolás Cachanosky
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How Does the Federal Reserve Evaluate Policy?
“If inflation does not relent in approaching months, this call for a modest tightening will likely develop support from other ranking members of the Fed. I’m willing to bet that support for tightening will be strongly correlated with the value of the loss function presented here.” ~ James L. Caton
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The Great Inflation Debate Is Missing Why Inflation Matters
“The public debate over inflation is a great opportunity to focus on what really matters: subjecting monetary policymakers to the rule of law. Unfortunately, we’re currently squandering that opportunity to repeat pop-macroeconomic fallacies.” ~ Alexander W. Salter
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How High Will Inflation Be in 2021?
“Inflation will be noticeably higher in 2021 than it has been in some time. An important question is whether it will be followed by the widely predicted lower inflation or by higher inflation in subsequent years.” ~ Gerald P. Dwyer
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Is Our Current Inflation Temporary? Look at the Numbers
“John Williams, the New York Fed President, is expecting 3% inflation this year. I’m expecting inflation in 2021 to be above 5%. In six months, we’ll be able to look at the actual numbers and see whose estimate was closer.” ~ Randall G. Holcombe
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Is Inflation Really a Problem?
“Inflation has real costs when it’s unpredictable. We want monetary institutions to keep generalized price increases on a steady, anticipable path. Since central banks often go out of their way not to be understood, we might have a valid complaint against them after all.” ~ Alexander W. Salter
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Is Inflation Merely Catching Up?
“The price level today is greater than what it was expected to be in the absence of a pandemic and what the Fed implicitly said it would be given its two-percent inflation target. The price level has more than caught up with expectations. The question, now, is whether it will continue to grow so rapidly, remain elevated, or subside.” ~ William J. Luther
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