Working Paper: NBER ID: w13970
Authors: Frederic S. Mishkin
Abstract: This paper discusses recent economic research that demonstrates that the objectives of price stability and stabilizing economic activity are often likely to be mutually reinforcing. Thus, the answer to the title of this paper--"Does stabilizing inflation contribute to stabilizing economic activity?"--is, for the most part, yes.
Keywords: Inflation; Economic Activity; Monetary Policy
JEL Codes: E31; E32; E52
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| stabilizing inflation (E31) | stabilizing economic activity (E63) |
| low inflation (E31) | economic welfare (D69) |
| high inflation (E31) | adverse economic outcomes (F69) |
| high inflation (E31) | lower economic activity (R11) |
| expansionary monetary policy (E52) | lower unemployment (J68) |
| strong commitment to price stability (E64) | effective policy responses to negative demand shocks (E65) |
| well-anchored inflation expectations (E31) | avoid severe conflicts between inflation and output (E31) |