What Are You Expecting? How The Fed Slows Down Inflation Through The Labor Market
Conventional wisdom has held that rate hikes slow inflation long enough that straightforward accounts of how exactly one turns into the other are hard to find. Today, everyone needs to be on the same page about how exactly it is that Fed policy in particular can slow inflation.
The Floor GLI Framework in Today's Context
We provide an update on what our in-house monetary policy framework suggests about the appropriate trajectory for monetary policy using more reliable “real-time” measures of gross labor income
"Real Wages" and Aggregation: A Methodological Mess
“Real wages” are often presented as a neutral measure of the ability of households to buy definite quantities of real goods after adjusting for changes in both prices and wages. In reality, "real wages" explain far less about household economic well-being than these stories confidently imply.
Offsetting Persistent Inflationary Pressures With Disinflationary Healthcare Policy
Healthcare policy interventions could provide downward pressure on core PCE both in 2022 and in the years ahead. Given the salience of inflation, disinflationary healthcare policies should be a key priority for Congress and the Biden Administration alike.
Inflation Expectations: Three Stories in Search of Evidence
Despite widespread use by commentators and policymakers, the models commonly used to argue for the importance of "inflation expectations" are difficult to confirm empirically, and risk a hawkish policy bias.
