TY  - BOOK
AU  - Meier,Andre
TI  - Still Minding the Gap-Inflation Dynamics during Episodes of Persistent Large Output Gaps
T2  - IMF Working Papers; Working Paper
SN  - 1455202231 :
SN  - 1018-5941
PY  - 2010///
CY  - Washington, D.C.
PB  - International Monetary Fund
KW  - General Outlook and Conditions
KW  - imf
KW  - Inflation Dynamics
KW  - Inflation Rates
KW  - Low Inflation
KW  - Output Gap
KW  - Phillips Curve
KW  - Germany
KW  - Japan
KW  - Netherlands
KW  - Sweden
KW  - United Kingdom
N2  - This paper studies inflation dynamics during 25 historical episodes in advanced economies where output remained well below potential for an extended period. We find that such episodes generally brought about significant disinflation, underpinned by weak labor markets, slowing wage growth, and, in many cases, falling oil prices. Indeed, inflation declined by about the same fraction of the initial inflation rate across episodes. That said, disinflation has tended to taper off at very low positive inflation rates, arguably reflecting downward nominal rigidities and well-anchored inflation expectations. Temporary inflation increases during episodes were, in turn, systematically related to currency depreciation or higher oil prices. Overall, the historical patterns suggest little upside inflation risk in advanced economies facing the prospect of persistent large output gaps
UR  - http://elibrary.imf.org/view/IMF001/11221-9781455202232/11221-9781455202232/11221-9781455202232.xml
UR  - http://www.imfbookstore.org/IMFORG/9781455202232
ER  -