We discuss the timing and strength of the Fed's reaction to the recent inflation surge within an estimated macroeconomic model where long-run inflation expectations are heterogeneous and can lose their anchoring to the target. The resulting inflation scare worsens the real cost of disinflation....

The first contribution of this paper is to develop a model that jointly accounts for the missing disinflation in the wake of the Great Recession and the subsequently observed inflation-less recovery. The key mechanism works through heterogeneous expectations that may durably lose their anchorage...

This paper develops a model that jointly accounts for the missing disinflation in the wake of the Great Recession and the subsequently observed inflation-less recovery. The key mechanism works through heterogeneous expectations that may durably lose their anchorage to the central bank (CB)'s...

Das zweite Kapitel trägt den Titel "Monetary and Fiscal Policy Interaction in a World with Heterogeneous Expectations."' Ein weiteres mal ist der Untersuchungsgegenstand die Fähigkeit einer Zentralbank, mittels Zinspolitik Preisstabilität in einer Ökonomie mit heterogenen Erwartungen...