Uncertainty about future inflation is often claimed to be one of the most important costs of inflation, since it distorts the workings of the price system and leads to allocational inefficiencies. This paper analyses U.K. inflation between 1950 and 1994 using the ARCH methodology, which enables...

There are a large number of labour market indicators that could be used by monetary policy makers to assess the state of the labour market and the associated implications for inflationary pressure. This paper attempts to assess their relative merits by evaluating their past performance in...