AMPF Papers

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Policy Note

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May 2023

Fiscal Events and Anchored Inflation Expectations

Ethan ILZETZKI
With inflation surging worldwide, some commentators have speculated whether inflation expectations have become unanchored. This policy note presents a framework to evaluate whether an inflationary spike is due to temporary shifts in policy or the real economy on one hand, or due to an unanchoring of...
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AMPF Papers

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Policy Note

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May 2023

Subjective Inflation Expectations and Monetary Policy Communication: The Role of Medium, Messenger, and Message

Michael WEBER
Inflation expectations of households and firms are central determinants in all dynamic macro models. Yet, empirical evidence suggests these decision makers form expectations in ways that deviate from the assumptions in these models: on average, inflation expectations are biased upwards relative to e...
Keywords: Macroeconomics, Intertemporal Choice, Consumption, Savings, Surveys, Monetary Policy, Fiscal Policy, Experiments, Financial Decision-making, Cognition, Communication.
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AMPF Papers

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Commissioned Paper

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May 2023

Natural and Neutral Real Interest Rates: Past and Future

Maurice OBSTFELD
Economists posit a critical real rate of interest below which the monetary policy setting is inflationary and above which it is deflationary. For roughly a decade after the Great Financial Crisis, many economists linked deflationary pressures to the difficulty central banks encountered in attaining ...
Keywords: interest rate, deflation, inflation, global factors, market indicators
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AMPF Papers

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Keynotes

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May 2023

Housing, Household Debt, and the Business Cycle An Application to China and Korea

Amir SUFI
A rise in household debt in the medium run produces a boom-bust pattern in economic activity, and the subsequent downturn after a large rise in household debt can be especially painful (e.g., Mian, Sufi and Verner (2017), Mian and Sufi (2018), Mian, Sufi and Verner (2020)). The original research sho...
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AMPF Papers

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Commissioned Paper

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May 2022

Has monetary policy cared too much about a poor measure of r*?

Ricardo REIS
Measures of the decline in r ∗ are (almost) exclusively based on a fall in government bond yields. Yet, measures of the return on private aggregate capital are roughly constant, or slightly increasing, in most advanced economies. This fact is robust across measures of the demand for capital, using...
Keywords: liquidity trap, zero lower bound, unconventional monetary policy.
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