We develop a new class of general equilibrium models with partially unfunded debt to propose a fiscal theory of persistent inflation. In response to business cycle shocks, the monetary authority controls inflation, and the fiscal authority stabilizes debt. However, the central bank accommodates...

Inflation is a persistent challenge that affects economies globally. The battle against inflation is crucial for maintaining economic stability and promoting growth. This study aims to examine the strategies employed by the United States to overcome inflation and maintain economic stability. The...

We offer a critique of a paper recently published Lorenzoni and Werning (2023) that seeks to make an original contribution to the hypothesis that inflation is primarily caused by conflict and reconcile the Post-Keynesian and New-Keynesian traditions. L&W’s paper has two sections. In the first...

Do "real" assets protect against inflation? Core inflation betas of stocks are negative while energy betas are positive; currencies, commodities, and real estate also mostly hedge against energy inflation but not core. These hedging properties are reflected in the prices of inflation risks: only...

The resurgence of inflation since the late 2021 is now accompanied by a reversal of prospects of growth, reviving fears of stagflation across the world (IMF 2022, World Bank 2022). In almost all accounts of the mounting stagflation threats a prominent role is played by the fall of households'...