Macro data suggests a convex relationship between inflation and economic slack, but identifying causality is challenging. Using micro data from large panel surveys of UK and US firms we show that the response of prices to demand shocks is also convex at the firm level. We obtain similar results...

In September 2007, the Bank of England hosted an international conference on the sources of macroeconomic stability. This article summarises some of the ideas and debates that were raised at the conference. It focuses particularly on the role of monetary policy in fostering macroeconomic...