The Genesis of Inflation and the Costs of Disinflation
This essay asks how high inflation arises and why it is costly to eliminate. Specifically, the paper discusses the roles of price rigidity and credibility problems in explaining the costs of disinflation; the puzzle of persistent inflation triggered by onetime macroeconomic shocks; and the case for returning to adaptive expectations in theories of inflation.
Journal of Money, Credit, and Banking, August 1991, 23(3), Part 2, pp. 439-452 citation courtesy of
Laurence Ball, 1991. "The genesis of inflation and the costs of disinflation," Proceedings, Federal Reserve Bank of Cleveland, pages 439-461. citation courtesy of