E31 - Price Level; Inflation; Deflation

• What to Target? Insights from a Lab Experiment

  Staff Working Paper 2021-53 Isabelle Salle

  In a laboratory experiment, we ask participants to predict inflation using three different policy regimes: inflation targeting—with and without greater communication of the target—average inflation targeting and price level targeting. We use participants’ predictions to compare the level and stability of inflation under each regime.

  Content Type(s): Staff research, Staff working papers Topic(s): Inflation targets, Monetary policy communications, Monetary policy framework JEL Code(s): C, C9, C92, E, E3, E31, E5, E52, E7

• What Can Stockouts Tell Us About Inflation? Evidence from Online Micro Data

  Staff Working Paper 2021-52 Alberto Cavallo, Oleksiy Kryvtsov

  Did supply disruptions and cost pressures play a role in rising inflation in 2020 during the COVID-19 pandemic? Using data collected from websites of large retailers in multiple sectors and countries, we show that shortages may indicate transitory inflationary pressures.

  Content Type(s): Staff research, Staff working papers Topic(s): Coronavirus disease (COVID-19), Inflation and prices JEL Code(s): D, D2, D22, E, E3, E31, E37

• Exploring the potential benefits of inflation overshooting

  Staff Analytical Note 2021-16 Robert Amano, Marc-André Gosselin, Kurt See

  After a period with the interest rate at the effective lower bound, temporarily overshooting inflation may offer important economic benefits. This may be especially true for vulnerable segments of the population, such as workers with low attachment to the labour force and the long-term unemployed.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Inflation targets, Labour markets, Monetary policy, Monetary policy framework JEL Code(s): E, E3, E31, E5, E52, J, J2, J20

• Adoption of Digital Technologies: Insights from a Global Survey Initiative

  Staff Discussion Paper 2021-7 James Fudurich, Lena Suchanek, Lise Pichette

  Firms are at the forefront of adopting new technology. Using survey data from a global network of central banks, we assess the effects of digitalization on firms’ pricing and employment decisions.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Firm dynamics, Inflation and prices, Labour markets JEL Code(s): D, D2, D22, E, E3, E31, J, J2, J21, O, O3, O33

• (Optimal) Monetary Policy with and without Debt

  Staff Working Paper 2021-5 Boris Chafwehé, Rigas Oikonomou, Romanos Priftis, Lukas Vogel

  How should policy be designed at high debt levels, when fiscal authorities have little room to adjust taxes? Assigning the monetary authority a role in achieving debt sustainability makes it less effective in stabilizing inflation and output.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Fiscal policy, Monetary policy, Monetary policy framework JEL Code(s): C, C1, C11, E, E3, E31, E5, E52, E58, E6, E62