Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/55570 
Full metadata record
DC FieldValueLanguage
dc.contributor.authorFuhrer, Jeffrey C.en
dc.contributor.authorOlivei, Giovanni P.en
dc.contributor.authorTootell, Geoffrey M. B.en
dc.date.accessioned2012-01-02-
dc.date.accessioned2012-02-23T08:00:19Z-
dc.date.available2012-02-23T08:00:19Z-
dc.date.issued2011-
dc.identifier.urihttp://hdl.handle.net/10419/55570-
dc.description.abstractThis paper discusses the likely evolution of U.S. inflation in the near and medium term on the basis of (1) past U.S. experience with very low levels of inflation, (2) the most recent Japanese experience with deflation, and (3) recent U.S. micro evidence on downward nominal wage rigidity. Our findings question the view that stable long-run inflation expectations and downward nominal wage rigidity will provide sufficient support to prices such that deflation can be avoided. We show that an inflation model fitted on Japanese data over the past 20 years, which accounts for both short- and long-run inflation expectations, matches the recent U.S. inflation experience quite well. While the model indicates that U.S. inflation might be subject to a lower bound, it does not rule out a prolonged period of mild deflation going forward. In addition, our micro evidence on wages suggests no obvious downward rigidity in the firm's wage costs, downward rigidity in individual wages notwithstanding. As a consequence, downward nominal wage rigidity may provide little offset to deflationary pressures in the current U.S. situation, despite some circumstantial evidence that this channel might have been at work in the past.en
dc.language.isoengen
dc.publisher|aFederal Reserve Bank of Boston |cBoston, MAen
dc.relation.ispartofseries|aWorking Papers |x11-17en
dc.subject.jelE31en
dc.subject.jelE52en
dc.subject.jelE12en
dc.subject.ddc330en
dc.subject.keywordinflationen
dc.subject.keywordanchored expectationsen
dc.subject.keywordsurvey expectationsen
dc.subject.keyworddownward nominal wage rigidityen
dc.subject.keywordPhillips curveen
dc.titleInflation dynamics when inflation is near zero-
dc.typeWorking Paperen
dc.identifier.ppn682045020en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

Files in This Item:
File
Size
738.36 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.