Lessons from history for successful disinflation

• 成果类型: Article
• 署名作者: Romer, Christina D.; Romer, David H.
• 署名单位: University of California System; University of California Berkeley
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2024.103654
• 发表日期: 2024
• 关键词: Disinflation; monetary policy; COMMITMENT; Inflation expectations; Narrative approach

摘要

Why are some attempts at disinflation successful and others failures? We investigate this question in the context of the Federal Reserve's attempts at disinflation since World War II. Our central finding is that a fundamental determinant of success was the strength of the Federal Reserve's commitment to disinflation at the start of its attempts. In episodes where its commitment was high, there were significant declines in inflation that were often long-lasting, while in ones where its commitment was low, falls in inflation were small and short-lived. We find that although the extent of the Federal Reserve's commitment was often clear to the public, there is no evidence that stronger commitment to disinflation directly affected expected inflation. Rather, the main channel through which weak commitment led to unsuccessful disinflation was premature abandonment of the disinflationary policy. We conclude by discussing the implications for the Federal Reserve's current effort at disinflation.