Monetary Policy Impact: How Inflation and Unemployment Shaped the Roaring Nineties
The article explores how inflation and unemployment in the US during the 1990s were influenced by factors like money growth, productivity, budget deficit, and trade deficit. The researchers found that monetary policy can have long-lasting effects on the economy, leading to a tradeoff between inflation and unemployment. This tradeoff was driven by the interaction between money growth and various real and nominal frictions.