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Reducing Inflation

Motivation and Strategy

While there is ample evidence that high inflation is harmful, little is known about how best to reduce inflation or how far it should be reduced. In this volume, sixteen distinguished economists analyze the appropriateness of low inflation as a goal for monetary policy and discuss possible strategies for reducing inflation.

Section I discusses the consequences of inflation. These papers analyze inflation’s impact on the tax system, labor market flexibility, equilibrium unemployment, and the public’s sense of well-being. Section II considers the obstacles facing central bankers in achieving low inflation. These papers study the precision of estimates of equilibrium unemployment, the sources of the high inflation of the 1970s, and the use of non-traditional indicators in policy formation. The papers in section III consider how institutions can be designed to promote successful monetary policy, and the importance of institutions to the performance of policy in the United States, Germany, and other countries.

This timely volume should be read by anyone who studies or conducts monetary policy.

432 pages | 60 line drawings, 61 tables | 6 x 9 | © 1997

National Bureau of Economic Research Studies in Business Cycles

Economics and Business: Economics--General Theory and Principles

Table of Contents

Acknowledgments
Introduction
Christina D. Romer, David H. Romer.
1: Why Do People Dislike Inflation?
Robert J. Shiller
Comment: N. Gregory Mankiw
2: Does Inflation "Grease the Wheels of the Labor Market"?
David Card, Dean Hyslop.
Comment: John Shea
3: The Costs and Benefits of Going from Low Inflation to Price Stability
Martin Feldstein
Comment: Andrew B. Abel
4: Disinflation and the NAIRU
Laurence Ball
Comment: Olivier J. Blanchard
5: How Precise Are Estimates of the Natural Rate of Unemployment?
Douglas Staiger, James H. Stock, Mark W. Watson.
Comment: Alan B. Krueger
6: America’s Peacetime Inflation: The 1970s
J. Bradford De Long
Comment: John B. Taylor
7: Do "Shortages" Cause Inflation?
Owen Lamont
Comment: Matthew D. Shapiro
8: Institutions for Monetary Stability
Christina D. Romer, David H. Romer.
Comment: Benjamin M. Friedman
9: Why Does Inflation Differ across Countries?
Marta Campillo, Jeffrey A. Miron.
Comment: Maurice Obstfeld
10: How the Bundesbank Conducts Monetary Policy
Richard Clarida, Mark Gertler.
Comment: Rudiger Dornbusch
Contributors
Author Index
Subject Index

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