Comments on “Lessons from history for successful disinflation” by Christina D. Romer and David H. Romer

Donald Kohn

Journal of Monetary Economics, 2024, vol. 148, issue S

Abstract: In these comments I extend the Romers' analysis to 1982–95, when inflation fell from 6 % to effective price stability with only one small recession. The Fed accomplished this, despite being only “moderately committed” to disinflation in the Romer classification, through careful weighing of shifting costs and benefits from tightening as inflation continued to moderate. Though policy backed off several times before stability was clearly in sight, success resulted from keeping focus on the ultimate price stability goal, pre-empting surges in inflation, and paying close attention to expectations. I close with suggestions about how the Fed can strengthen its price stability commitment in the 5-year review of its policy framework slated to begin in 2024.

Keywords: Disinflation; Monetary policy; Commitment; Great moderation; Federal reserve (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:148:y:2024:i:s:s0304393224000990

DOI: 10.1016/j.jmoneco.2024.103646

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