Inflation, unemployment and monetary policy – new research findings

Date 18/09/2013

Gabriela Guibourg, Christian Nilsson and Ulf Söderström report from a seminar that the Riksbank arranged in early 2013 and give an account of several complex issues that were the subject of intense discussion. How is the trade-off between inflation and unemployment affected when inflation expectations are anchored around the inflation target? Do well-anchored inflation expectations help to limit a fall in inflation when unemployment increases? Is there a risk that well-anchored inflation expectations together with inflation outcomes below the target will help to increase unemployment? Can the ECB help to reduce unemployment in the crisis countries of the euro area by temporarily increasing inflation in the entire euro area?

 

The article is included in this year's second issue of the Sveriges Riksbank Economic Review, which has been published today.