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Speech by Governor Jefferson on discussion of the paper "Managing Disinflations" - Federal Reserve Board
Source: federalreserve.gov
Article summary:
1. The paper discusses the costs of disinflation and provides advice to monetary policymakers on how to manage it.
2. The authors argue that a higher initial inflation rate is associated with a lower sacrifice ratio, and that easing monetary policy before the disinflation is complete or easing by too much is costly.
3. The article also highlights the difficulty of forecasting inflation in real time due to pandemic-specific factors, and suggests that economic models need to be used with careful interpretation and judgment when history does not speak to the current situation.
Article analysis:
The article is written by Governor Jefferson of the Federal Reserve Board, discussing a paper titled "Managing Disinflations" by Cecchetti et al. The article is generally reliable and trustworthy, as it presents an objective overview of the paper's main points and offers insights into its implications for monetary policy.
The article does not appear to be biased or one-sided in its reporting, as it objectively summarizes the authors' takeaways from their analysis without taking sides or promoting any particular point of view. It also acknowledges potential counterarguments and alternative explanations for certain findings, such as noting that while central bankers may entertain hopes that they will directly see a dividend from early, forceful policy actions, historical experience suggests that they should not count on such a favorable outcome.
The article does not appear to make unsupported claims or omit important points of consideration; rather, it provides evidence for each claim made and explores various aspects of managing disinflation in detail. Furthermore, it acknowledges potential risks associated with certain policies and notes that economic models need to be used with careful interpretation and judgment when history does not speak to the current situation.
In conclusion, this article appears to be reliable and trustworthy in its reporting on the paper "Managing Disinflations" by Cecchetti et al., providing an objective overview of its main points without making unsupported claims or omitting important points of consideration.