This paper compares different methods for estimating forward-looking output and inflation Euler equations and shows that weak identification can be an issue in conventional GMM estimation. The authors propose a GMM procedure that imposes the dynamic constraints implied by the forward-looking...

We compare different methods for estimating forwardlooking output and inflation equations and show that weak identification can be an issue in conventional GMM estimation. GMM and maximum likelihood procedures that impose the dynamic constraints implied by the forwardlooking relation on the...

This paper discusses the likely evolution of U.S. inflation in the near and medium term on the basis of (1) past U.S. experience with very low levels of inflation, (2) the most recent Japanese experience with deflation, and (3) recent U.S. micro evidence on downward nominal wage rigidity. Our...

This brief examines two issues of current interest concerning inflation: (1) whether "well-anchored" expectations will help to restrain inflation's decline and whether an "un-anchoring" of expectations could lead to undesirably high inflation and (2) to what extent output (or utilization) gaps...

The goal of monetary policy as conducted by the Bank of Japan is to contribute to the sound development of the national economy through the pursuit of price stability. The objective of price stability, however, is not precisely defined as it has been for other central banks. Following the...

Over the past 30 years, debates about the usefulness of the Phillips curve for explaining inflation have been ongoing. One of the reasons for the recurring debate about the existence of an inflation and unemployment tradeoff is that there have been several instances when large movements in the...

When the Federal Reserve Bank of Boston chose "Rethinking the International Monetary System" as the topic for its 43rd Economic Conference, it was clear that the worst international financial crisis in decades had caused tremors within the economics profession and the policymaking establishment....

The recent spate of severe financial crises has provoked an interest in international monetary reform not seen since the breakdown of the fixed exchange rate system 30 years ago. Indeed, the crises have forced both academic economists and policymakers to question some of their most basic...

Monetary policy as conducted by the Swiss National Bank is aimed at maintaining price stability in the medium term. Between 1980 and 1999, the Bank used the seasonally adjusted monetary base as monetary target and as indicator. Given the continually distorted indicator value of the monetary base...