Inflation and Monetary Policy: Past and Present

After more than two decades of price stability, the recent surge in inflation has brought the control of inflation back to the forefront of macroeconomic policy concerns. Understanding the degree to which this spike in inflation is due to the economic policies enacted in response to the COVID-19 pandemic, inevitable dislocation associated with the effects of the pandemic, loss of confidence in the Federal Reserve’s willingness to tighten policy enough to maintain price stability, or other factors is central to conducting policy appropriately going forward.

This project will study the economic causes and consequences of the recent inflation surge, as well as theory and applied work how various monetary policy actions can affect inflation dynamics