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Conference Paper
Hysteresis in unemployment
Hysteresis is central to long-run unemployment movements in many countries. This essay addresses two broad issues. The first is whether there is clear evidence of hysteresis effects. To put it differently, can we reject the hypothesis that the NAIRU, and hence the long run behavior of unemployment, is independent of aggregate demand? The second broad issue is the nature of hysteresis. Through what mechanisms do short-run unemployment movements influence the NAIRU? What determines the strength of these effects in different countries and time periods? What are the implications for monetary ...
Working Paper
What determines the sacrifice ratio?
Working Paper
Expectations and the effects of monetary policy
This paper examines the predictive power of shifts in monetary policy, as measured by changes in the real federal funds rate, for output, inflation, and survey expectations of these variables. The authors find that policy shifts have larger effects on actual output than on expected output; thus policy predicts errors in output expectations, a violation of rational expectations. Policy shifts do not predict errors in inflation expectations. The authors explain these results with a model in which agents systematically underestimate the effects of policy on aggregate demand. This model helps to ...
Working Paper
Imperfect information and staggered price setting
Working Paper
Relative-price changes as aggregate supply shocks
Conference Paper
A sticky-price manifesto
Journal Article
How costly is disinflation? The historical evidence
Conference Paper
The genesis of inflation and the costs of disinflation
Working Paper
Expectations and the effects of monetary policy