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Low inflation: the surprise of the 1990s

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  • Dean Croushore

Abstract

For most of the 1990s, forecasters have been predicting an upturn in inflation. Yet, over that same period, the United States has experienced stable or declining inflation. Why have forecasts been at odds with reality? And why does it matter? In this article, Dean Croushore considers some answers to these questions and explains why inflation is the economic surprise of the decade.

Suggested Citation

  • Dean Croushore, 1998. "Low inflation: the surprise of the 1990s," Business Review, Federal Reserve Bank of Philadelphia, issue Jul, pages 3-12.
    • Handle: RePEc:fip:fedpbr:y:1998:i:jul:p:3-12
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    File URL: https://www.philadelphiafed.org/-/media/frbp/assets/economy/articles/business-review/1998/july-august/brja98dc.pdf
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    References listed on IDEAS

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    1. Douglas Staiger & James H. Stock & Mark W. Watson, 1997. "The NAIRU, Unemployment and Monetary Policy," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 33-49, Winter.
    2. Judd, John P & Trehan, Bharat, 1995. "The Cyclical Behavior of Prices: Interpreting the Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(3), pages 789-797, August.
    3. Dean Croushore, 1996. "Inflation forecasts: how good are they?," Business Review, Federal Reserve Bank of Philadelphia, issue May, pages 15-25.
    4. Chadha, Bankim & Prasad, Eswar, 1994. "Are prices countercyclical? Evidence from the G-7," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 239-257, October.
    5. Cooley, Thomas F. & Ohanian, Lee E., 1991. "The cyclical behavior of prices," Journal of Monetary Economics, Elsevier, vol. 28(1), pages 25-60, August.
    6. Mary C. Daly, 1997. "Labor market effects of welfare reform," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue aug29.
    7. Dean Croushore, 1993. "Introducing: the survey of professional forecasters," Business Review, Federal Reserve Bank of Philadelphia, issue Nov, pages 3-15.
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    Cited by:

    1. Don H. Kim, 2009. "Challenges in macro-finance modeling," Review, Federal Reserve Bank of St. Louis, vol. 91(Sep), pages 519-544.

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