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Perspectives on U.S. Monetary Policy and the Return to Price Stability

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  • Richard H. Clarida

    (Lowell Harriss Professor of Economics and International Affairs Columbia University)

Abstract

“Starting in mid-2021, as inflation started to rise globally, many central banks went through similar sequences of responses. First they looked through the shocks in the sense of not reacting to rising inflation. This inert response was typically defended by pointing to the supply-side origins of the inflation as well as the likelihood that high inflation would prove to be temporary. However, when inflation shocks kept materializing, central banks pivoted to a much more aggressive policy stance. Policymakers then spent considerable effort defending the pivot as being necessary to anchor expectations in order to avoid igniting a wage-price spiral.” Beaudry, Carter, and Lahiri (2022)

Suggested Citation

  • Richard H. Clarida, 2024. "Perspectives on U.S. Monetary Policy and the Return to Price Stability," International Journal of Central Banking, International Journal of Central Banking, vol. 20(2), pages 1-16, April.
    • Handle: RePEc:ijc:ijcjou:y:2024:q:2:a:1
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    References listed on IDEAS

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    1. Ben S. Bernanke & Michael T. Kiley & John M. Roberts, 2019. "Monetary Policy Strategies for a Low-Rate Environment," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 421-426, May.
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