MACRO: Dr Giovanni Nicolo (Federal Reserve Board)
Inflation and Real Activity over the Business Cycle
We study the relation between inflation and real activity over the business cycle. We employ a Trend-Cycle VAR to control for low-frequency movements in inflation, unemployment, and growth that are pervasive in the post-WWII period. We show that cyclical fluctuations of inflation are related to cyclical movements in real activity and unemployment, in line with what is implied by the New Keynesian framework. We then discuss the reasons for which our results relying on a Trend-Cycle VAR differ from the findings of previous studies based on VAR analysis. We explain empirically and theoretically how to reconcile these differences.
Date
Tuesday, 05 May 2026
Time
4pm to 5:15pm
Venue
In person Seminar
AS2-03-12 Lim Tay Boh Seminar Room (LTBSR)
AS2-03-12 Lim Tay Boh Seminar Room (LTBSR)