E31 - Price Level; Inflation; Deflation
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Job Ladder and Business Cycles
During downturns, workers get stuck in low-productivity jobs and wages remain stagnant. I build an heterogenous agent incomplete market model with a full job ladder that accounts for these facts. An adverse financial shock calibrated to the US Great Recession replicates the period’s slow recovery and missing disinflation. -
Household Heterogeneity and the Performance of Monetary Policy Frameworks
Consumption inequality and a low interest rate environment are two important trends in today’s economy. But the implications they may have—and how those implications interact—within different monetary policy frameworks are not well understood. We study the ranking of alternative frameworks that take these trends into account. -
The Impact of Globalization and Digitalization on the Phillips Curve
Globalization is in retreat, yet digitalization is on the rise. How will these trends impact inflation? -
On the Wedge Between the PPI and CPI Inflation Indicators
We find that the CPI and PPI inflation indexes co-moved strongly throughout the late 20th century, but their correlation has fallen substantially since the early 2000s. We offer a structural explanation for this divergence based on the growth of global supply chains since 2000. This finding offers a unique perspective for the future design of optimal monetary policy.