Reflections on the Disinflationary Methods of Poincaré and Thatcher
James Bullard
Speech from Federal Reserve Bank of St. Louis
Abstract:
St. Louis Fed President Jim Bullard talked about the academic literature related to “credible” versus “incredible” disinflation and how that may apply to current conditions. He spoke before the Money Marketeers of New York University. Current inflation in the U.S. and the euro area (EA) is near 1970s levels, Bullard said. The disinflation under former Fed Chair Paul Volcker was costly, he added, but it was not credible initially—Volcker had to earn credibility. Nobel laureate and economist Thomas Sargent initiated a literature on costless disinflation (“soft landings”) that emphasized inflation expectations as the key variable, not the Phillips curve, Bullard noted. Subsequent literature illustrated how credibility might be earned in models that depart from rational expectations, he said. “The Fed and the ECB [European Central Bank] have considerable credibility compared with their 1970s counterparts, suggesting that a soft landing is feasible in the U.S. and the EA if the post-pandemic regime shift is executed well,” Bullard concluded.
Keywords: inflation; disinflation; soft landings; costless disinflation (search for similar items in EconPapers)
Date: 2022-08-02
New Economics Papers: this item is included in nep-ban, nep-his and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://www.stlouisfed.org/from-the-president/spee ... are-and-thatcher-nyc Presentation description (text/html)
https://www.stlouisfed.org/-/media/project/frbstl/ ... eers-02-aug-2022.pdf Presentation slides (application/pdf)
Related works:
Working Paper: Reflections on the Disinflationary Methods of Poincaré and Thatcher (2022) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlps:94556
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in Speech from Federal Reserve Bank of St. Louis Contact information at EDIRC.
Bibliographic data for series maintained by Scott St. Louis ().