Unconventional Policy and Inflation

Jing Cynthia Wu, Yinxi Xie () and Ji Zhang

No 33044, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the effects of unconventional monetary and fiscal policies on inflation dynamics. Using multiple complementary empirical approaches, including event studies, vector autoregressions, and regional panel regressions, we find little evidence that these policies contributed meaningfully to inflation in the past decades. The key economic mechanism operates through a disinflationary supply-side channel in the Phillips curve, which offsets the upward pressure on inflation from the usual demand channel. We demonstrate this mechanism both theoretically and empirically.

JEL-codes: E31 E52 E63 (search for similar items in EconPapers)
Date: 2024-10
New Economics Papers: this item is included in nep-ban, nep-cba, nep-mac and nep-mon
Note: AP EFG ME
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