Inflation expectations are at least in part a reflection of both fiscal and monetary policies. Fiscal policies are grim. Is our new Fed chairman likely to follow a rules based policy and therefore more reliable as an anchor on inflation expectations?
Can "expectations" capture everything necessary for the Fed to respond to a secoral shock that requires substantial movement of relative prices some of which are downwardly sticky? How far can we get with a one good one input one relative price model?
This is probably a silly question, but is there anything special about a 2% inflation rate? Why not 2.5% or 1.5%? Just asking. Thank you for attempting to educate this old hermit.
Inflation expectations are at least in part a reflection of both fiscal and monetary policies. Fiscal policies are grim. Is our new Fed chairman likely to follow a rules based policy and therefore more reliable as an anchor on inflation expectations?
Can "expectations" capture everything necessary for the Fed to respond to a secoral shock that requires substantial movement of relative prices some of which are downwardly sticky? How far can we get with a one good one input one relative price model?
This is probably a silly question, but is there anything special about a 2% inflation rate? Why not 2.5% or 1.5%? Just asking. Thank you for attempting to educate this old hermit.