The global deflation shock – how big and how bad? Gavyn Davies, Financial Times, 11 Jan 2015
Category: Inflation
Deflation Dangers
Sharp falls in inflation expectations are challenging market assumptions about future rate hikes…
Deflation threat to Draghi’s credibility, Financial Times 16 Oct 2014
China inflation slips to near five-year low, Reuters, 15 Oct 2014
Rate expectations change faster than the data, Financial Times, 15 Oct 2014
On the oft-cited 5-year/5-year breakeven inflation rate (as a measure of inflation expectations) good places to start are…
Inflation Expectations: How the Market Speaks, FRBSF Economic Letter, 3 Oct 2005
FRED codes are T5YIFR (daily) and T5IFRM (monthly)
Assessing the risk to inflation from inflation expectations, BoE Quarterly Bulletin, 2014 Q2
Inflation Expectations in the Euro area: A review of recent developments, ECB Monthly Bulletin, Feb 2011 (the ECB regularly reports updates in its regular publications)
The IMF’s World Economic Reports often include estimated probabilities of deflation by global region. The October 2014 update can be found here.
A short primer on deflation was published by the St Louis FRB in February 2011: “Deflation: Who Let the Air Out?“
High Frequency Inflation
The Billion Prices Project started in 2008 and is an academic initiative that uses prices collected from hundreds of online retailers around the world on a daily basis to conduct economic research…
The Billion Prices Project, MIT
For data and other information also see PriceStats
Septaphobia
Explaining why elites may be biased towards tough policy on inflation…
Hard money is not a mistake, Interfluidity, 1 Sep 2014
Nowcasting US Inflation
The Cleveland Fed, notable for its work on inflation expectations, proposes a new and parsimonious model for nowcasting headline and core inflation in the US price index for personal consumption expenditures (PCE) and the consumer price index (CPI)…
Nowcasting US Headline and Core Inflation, FRB Cleveland Working Paper, May 2014
FRB Cleveland Inflation Nowcasting website
Recent Inflation Analysis
The Ups and Downs of Inflation and the Role of Fed Credibility, FRB St Louis, The Regional Economist, Apr 2014
This article looks at the US history of interest rates and inflation to clarify ideas about monetary policy and credibility. Inflation expectations turn out to be key.
Inflation targeting vs price-level targeting: A new survey of theory and empirics, VoxEU, 11 May 2014
This article reviews the merits of price-level targeting. The latter could potentially help monetary policy deal with the zero bound on nominal interest rates. Such beneficial effects depend on rational expectations and a New Keynesian structure of the economy.
Financial Market Outlook for Inflation, FRB San Francisco Economic Letter, 12 May 2014
Inflation caps and floors give evidence that investors seem less uncertain about inflation forecasts than in recent years, and that they perceive a favorable inflation outcome as increasingly likely.
Phillips Curve Revisited
Using US regional data to re-examine the stability of the Phillips Curve…
Is There a Stable Phillips Curve After All? FRB Minneapolis, 8 Nov 2013
US Inflation Update
The latest PCE deflator data show that US inflation pressures remain subdued and that the Fed’s aggressive bond buying is likely to persist. Core PCE inflation is now just over 1% – the lowest in two years….
Lower inflation curbs risk of early Fed bond tapering, Reuters, 29 Apr 2013
Credible Central Banks
Central banks have many tools at their disposal when implementing monetary policy: repo rates, QE and other balance sheet wheezes. However, as noted before, arguably their most powerful weapon is credibility… Continue reading Credible Central Banks
Money & Inflation
A primer on the functions of money and how they can be undermined by too much inflation…
Money and Inflation: A Functional Relationship, Page One Economics, FRB St Louis, March 2013