Changing inflation dynamics, evolving monetary policy: an overview
Understanding the dynamics of inflation has become an important challenge for both policymakers and researchers over the past decade. Empirical models linking inflation and economic activity—versions of the so-called Phillips curve—have failed to account for the behavior of inflation in many adv...
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| Autores principales: | , , |
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| Formato: | Artículo |
| Lenguaje: | English |
| Publicado: |
Banco Central de Chile
2020
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| Materias: | |
| Acceso en línea: | https://hdl.handle.net/20.500.12580/4878 |
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| Sumario: | Understanding the dynamics of inflation has become an important
challenge for both policymakers and researchers over the past decade.
Empirical models linking inflation and economic activity—versions of
the so-called Phillips curve—have failed to account for the behavior of
inflation in many advanced economies. In particular, inflation in the U.S.
and other countries was higher during the 2008-2009 Great Recession
than the conventional empirical Phillips curve would imply. As noted by
some economists, this “missing deflation” phenomenon may have already
started in the mid-2000s. Just as puzzling, during the subsequent
recovery, inflation has remained subdued relative to the predictions
generated by existing models, despite the aggressive expansionary
monetary policies implemented in many advanced economies. |
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