Presenting an analysis of the rise and fall of U.S. inflation after 1960, this book examines two broad explanations for the behaviour of inflation and unemployment in this period: the natural-rate hypothesis joined to the Lucas critique and a more traditional econometric policy evaluation modified to include adaptive expectations and learning. The text begins with an explanation of how American policymakers increased inflation in the early 1960s by following erroneous assumptions about the exploitability of the Phillips curve - the inverse-relationship between inflation and unemployment. In subsequent chapters, it connects a sequence of ideas, such as self-confirming equilibria, least-squares and other adaptive or recursive learning algorithms. The author synthesizes results from macroeconomics, game theory, control theory, and other fields to extend both adaptive expectations and rational expectations theory, and he explains postwar inflation in terms of drifting coefficients. He interprets his results in favour of adaptive expectations as the relevant mechanism affecting inflation policy. This book is intended for academics, graduate students, and professional economists.
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Editorial Reviews
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A path-breaking contribution. . . . It is a basic reference to understand--and develop--dynamic macroeconomic theory in the 21st Century. -- Ramon Marimon, Journal of Economic Literature
From the Back Cover
"A brilliant technical treatise that includes both new results and original synthesis. . . . The Conquest of American Inflation may help to fashion a new paradigm in macroeconomic analysis."--Ben Bernanke, Princeton University
"A very deep and very subtle piece of scholarship.... Sargent is most impressive in his ability to bring theoretical arguments to bear on the problem of distinguishing empirically between the two histories of postwar inflation."--Thomas F. Cooley, University of Rochester
"The Conquest of American Inflation is a fascinating document, marshalling sophisticated economic theory and econometrics to the task of explaining the past 50 years of U.S. monetary policy and its interaction with macroconomic activity. It will surely be widely cited and widely discussed."--Robert King, University of Virginia
"A fascinating study of a real-world phenomenon that uses ideas from recent theoretical work on bounded rationality. Brilliant and pathbreaking."--David Kreps, Stanford University
--This text refers to the Paperback edition.
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Inflation,
This review is from: The Conquest of American Inflation. (Hardcover)
The inflation situation is described and cured in this magnificent book. It shows mortals like myself, what causes inflation and how the whole economic society is linked together.
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First Sentence:
Figure 1.1 plots the annual rate of inflation in the U.S. consumer price index since World War II. Read the first page Key Phrases - Statistically Improbable Phrases (SIPs): (learn more)
classical identification scheme, drifting coefficients, rational expectations version, vindication story, continuation values, best response dynamics, classical direction, econometric policy evaluation, approximating model, rational expectations equilibria, gain sequence, coefficient drift, confidence ellipsoids, lagged inflation, misspecified model, natural rate hypothesis, promised value, adaptive expectations, forecasting rule, rational expectations equilibrium, adaptive model, confidence ellipses, rational expectations models, subgame perfect equilibrium, parameter drift Key Phrases - Capitalized Phrases (CAPs): (learn more)
Lucas's Critique, Federal Reserve, Bretton Woods, Keynesian Phillips, Margaret Bray New!
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Front Cover | Table of Contents | First Pages | Index | Back Cover | Surprise Me!
Figure 1.1 plots the annual rate of inflation in the U.S. consumer price index since World War II. Read the first page Key Phrases - Statistically Improbable Phrases (SIPs): (learn more)
classical identification scheme, drifting coefficients, rational expectations version, vindication story, continuation values, best response dynamics, classical direction, econometric policy evaluation, approximating model, rational expectations equilibria, gain sequence, coefficient drift, confidence ellipsoids, lagged inflation, misspecified model, natural rate hypothesis, promised value, adaptive expectations, forecasting rule, rational expectations equilibrium, adaptive model, confidence ellipses, rational expectations models, subgame perfect equilibrium, parameter drift Key Phrases - Capitalized Phrases (CAPs): (learn more)
Lucas's Critique, Federal Reserve, Bretton Woods, Keynesian Phillips, Margaret Bray New!
Books on Related Topics | Concordance | Text Stats Browse Sample Pages:
Front Cover | Table of Contents | First Pages | Index | Back Cover | Surprise Me!
Citations (learn more)
This book cites 17
books:
See all 17 books this book cites
- Modern Business Cycle Theory by Robert J. Barro in Back Matter (1), and Back Matter (2)
- Deterministic and Stochastic Optimal Control (Stochastic Modelling and Applied Probability) (v. 1) by Wendell H. Fleming in Back Matter
- Recursive Macroeconomic Theory by Lars Ljungqvist in Back Matter
- Computational Economics by David A. Kendrick in Back Matter
- Collected Works of Bernard Lonergan (vol. 15): Macroeconomic Dynamics: An Essay in Circulation Analysis by Bernard Lonergan in Back Matter
See all 17 books this book cites
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