TY - BOOK ID - 84659154 TI - Still Minding the Gap—Inflation Dynamics during Episodes of Persistent Large Output Gaps AU - Meier, Andre. AU - International Monetary Fund. PY - 2010 SN - 1462397107 1455286885 1282846612 9786612846618 1455202231 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - At head of title: European Department. KW - Inflation (Finance) KW - Input-output analysis KW - Monetary policy KW - Econometric models. KW - Interindustry economics KW - Economics, Mathematical KW - National income KW - Input-output tables KW - Finance KW - Natural rate of unemployment KW - Monetary management KW - Economic policy KW - Currency boards KW - Money supply KW - Accounting KW - Banks and Banking KW - Inflation KW - Macroeconomics KW - Production and Operations Management KW - Price Level KW - Deflation KW - Macroeconomics: Production KW - Interest Rates: Determination, Term Structure, and Effects KW - Energy: Demand and Supply KW - Prices KW - Banking KW - Output gap KW - Disinflation KW - Central bank policy rate KW - Oil prices KW - Production KW - Economic theory KW - Interest rates KW - Japan UR - https://www.unicat.be/uniCat?func=search&query=sysid:84659154 AB - This paper studies inflation dynamics during 25 historical episodes in advanced economies where output remained well below potential for an extended period. We find that such episodes generally brought about significant disinflation, underpinned by weak labor markets, slowing wage growth, and, in many cases, falling oil prices. Indeed, inflation declined by about the same fraction of the initial inflation rate across episodes. That said, disinflation has tended to taper off at very low positive inflation rates, arguably reflecting downward nominal rigidities and well-anchored inflation expectations. Temporary inflation increases during episodes were, in turn, systematically related to currency depreciation or higher oil prices. Overall, the historical patterns suggest little upside inflation risk in advanced economies facing the prospect of persistent large output gaps. ER -