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Governor Frederic S. Mishkin
At East Carolina University's Beta Gamma Sigma Distiguished Lecture Series, Greenville, North Carolina
February 25, 2008

Does Stabilizing Inflation Contribute to Stabilizing Economic Activity?

The ultimate purpose of a central bank should be to promote the public good through policies that foster economic prosperity. Research in monetary economics describes this purpose by specifying monetary policy objectives in terms of stabilizing both inflation and economic activity. Indeed, this specification of monetary policy objectives is exactly what is suggested by the dual mandate that the Congress has given to the Federal Reserve to promote both price stability and maximum employment.1

We might worry that, under some circumstances, the objectives of stabilizing inflation and economic activity could conflict, particularly in the short run. However, economic research over the past three decades suggests that such conflicts may not, in fact, be that serious. Indeed, stabilizing inflation and stabilizing economic activity are mutually reinforcing not only in the long run, but in the short run as well. In my remarks today, I would like to outline how economic researchers came to that conclusion, and in so doing, explain why it is so important to achieve and maintain price stability.2

The Long Run
Both economic theory and empirical evidence indicate that the stabilization of inflation promotes stronger economic activity in the long run.3 Two principles underlie that conclusion. The first principle is that low inflation is beneficial for economic welfare. Rates of inflation significantly above the low levels of recent years can have serious adverse effects on economic efficiency and hence on output in the long run. The distortions from a moderate to high level of long-run inflation are many. High inflation can cause confusion among households and firms, thereby distorting savings and investment decisions (Lucas, 1972; Briault, 1995; Shafir, Diamond, and Tversky, 1997). The interaction of inflation and the tax code, which is often applied to nominal income, can have adverse effects, especially on the incentive of firms to invest in productive capital (Feldstein, 1997). Infrequent nominal price adjustment implies that high inflation results in distorted relative prices, thereby leading to an inefficient allocation of resources (Woodford, 2003). And high inflation distorts the financial sector as firms and households demand greater protection from inflation’s erosion of the value of cash holdings (English, 1999).

The second principle is the lack of a long-run tradeoff between unemployment and the inflation rate. Rather, the long-run Phillips curve is vertical, implying that the economy gravitates to some natural rate of unemployment in the long run no matter what the rate of inflation is (Friedman, 1968; Phelps, 1968).4 The natural rate, in turn, is determined by the structure of labor and product markets, including elements such as the ease with which people who lose their jobs can find new employment and the pace at which technological progress creates new industries and occupations while shrinking or eliminating others. Importantly, those structural features of the economy are outside the control of monetary policy. As a result, any attempt by a central bank to keep unemployment below the natural rate would prove fruitless. Such a strategy would only lead to higher inflation that, as the first principle suggests, would lower economic activity and household welfare in the long run.

Empirical evidence has starkly demonstrated the adverse effects of high inflation (e.g., see the surveys in Fischer, 1993, and Anderson and Gruen, 1995). In most industrialized countries, the late 1960s to early 1980s was a period during which inflation rose to high levels while economic activity stagnated. While many factors contributed to the improved economic performance of recent decades, policymakers' focus on low and stable inflation was likely an important factor.5

The Short Run
Although there is no long-run tradeoff between unemployment and inflation, in the short run, expansionary monetary policy that raises inflation can lower unemployment and raise employment. That is, the short-run Phillips curve is not vertical. That fact would seem to suggest that achieving the dual goals of price stability and maximum sustainable employment might at times conflict. However, several lines of research provide support for the view that stabilization of inflation and economic activity can be complementary rather than in conflict.

Economists have long recognized that some sources of economic fluctuations imply that output stability and inflation stability are mutually reinforcing. Consider a negative shock to aggregate demand (such as a decline in consumer confidence) that causes households to cut spending. The drop in demand leads, in turn, to a decline in actual output relative to its potential--that is, the level of output that the economy can produce at the maximum sustainable level of employment. As a result of increased slack in the economy, future inflation will fall below levels consistent with price stability, and the central bank will pursue an expansionary policy to keep inflation from falling. The expansionary policy will then result in an increase in demand that boosts output toward its potential to return inflation to a level consistent with price stability. Stabilizing output thus stabilizes inflation and vice versa under these conditions.

For example, the Federal Reserve reduced its target for the federal funds rate a total of 5-1/2 percentage points during the 2001 recession; that stimulus not only contributed to economic recovery but also helped to avoid an unwelcome decline in inflation below its already low level. At other times, a tightening of the stance of monetary policy has prevented the economy from overheating and generating a boom-bust cycle in the level of employment as well as an undesirable upward spurt of inflation.

One critical precondition for effective central-bank easing in response to adverse demand shocks is anchored long-run inflation expectations. Otherwise, lowering short-term interest rates could raise inflation expectations, which might lead to higher, rather than lower, long-term interest rates, thereby depriving monetary policy of one of its key transmission channels for stimulating the economy. The role of expectations illustrates two additional basic principles of monetary policy that help explain why stabilizing inflation helps stabilize economic activity: First, expectations of future policy actions and accompanying economic conditions play a crucial role in determining the effects of current policy actions on the economy. Second, monetary policy is most effective when the central bank is firmly committed, through its actions and statements, to a "nominal anchor"--such as to keeping inflation low and stable. A strong commitment to stabilizing inflation helps anchor inflation expectations so that a central bank will not have to worry that expansionary policy to counter a negative demand shock will lead to a sharp rise in expected inflation--a so-called inflation scare (Goodfriend, 1993, 2005). Such a scare would not only blunt the effects of lower short-term interest rates on real activity but would also push up actual inflation in the future. Thus, a strong commitment to a nominal anchor enables a central bank to react more aggressively to negative demand shocks and, therefore, to prevent rapid declines in employment or output.

Unlike demand shocks, which drive inflation and economic activity in the same direction and thus present policymakers with a clear signal for how to adjust policy, supply shocks, such as the increases in the price of energy that we have been experiencing lately, drive inflation and output in opposite directions. In this case, because tightening monetary policy to reduce inflation can lead to lower output, the goal of stabilizing inflation might conflict with the goal of stabilizing economic activity.

Here again, a strong, previously established commitment to stabilizing inflation can help stabilize economic activity, because supply shocks, such as a rise in relative energy prices, are likely to have only a temporary effect on inflation in such circumstances. When inflation expectations are well anchored, the central bank does not necessarily need to raise interest rates aggressively to keep inflation under control following an aggregate supply shock. Hence, the commitment to price stability can help avoid imposing unnecessary hardship on workers and the economy more broadly.

The experience of recent decades supports the view that a substantial conflict between stabilizing inflation and stabilizing output in response to supply shocks does not arise if inflation expectations are well anchored. The oil shocks in the 1970s caused large increases in inflation not only through their direct effects on household energy prices but also through their "second round" effects on the prices of other goods that reflected, in part, expectations of higher future inflation. Sharp economic downturns followed, driven partly by restrictive monetary policy actions taken in response to the inflation outbreaks. In contrast, the run-up in energy prices since 2003 has had only modest effects on inflation for other goods; as a result, monetary policy has been able to avoid responding precipitously to higher oil prices. More generally, the period from the mid-1960s to the early 1980s was one of relatively high and volatile inflation; at the same time, real activity was very volatile. Since the early 1980s, central banks have put greater weight on achieving low and stable inflation, while during the same period, real activity stabilized appreciably. Many factors were likely at work, but this experience suggests that inflation stabilization does not have to come at the cost of greater volatility of real activity; in fact, it suggests that, by anchoring inflation expectations, low and stable inflation is an important precondition for macroeconomic stability.

Research over the past decade using so-called New Keynesian models has added further support to the proposition that inflation stabilization may contribute to stabilizing employment and output at their maximum sustainable levels. This research has also led to a deeper understanding of the benefits of price stability and the setting of monetary policy in response to changes in economic activity and inflation.

In particular, research has emphasized the interaction between stabilizing inflation and economic activity and has found that price stability can contribute to overall economic stability in a range of circumstances. The intuition that leads to the conclusion that stabilizing inflation promotes maximum sustainable output and employment is simple, and it holds in a range of economic models whose policy prescriptions have been dubbed the New Neoclassical Synthesis. To begin, the prices of many goods and services adjust infrequently. Accordingly, under general price inflation, the prices of some goods and services are changing while other prices do not, thus distorting relative prices between different goods and services. As a consequence, the profitability of producing the various goods and services no longer reflects the relative social costs of producing them, which in turn yields an inefficient allocation of resources. A policy of price stability minimizes those inefficiencies (Goodfriend and King, 1997; Rotemberg and Woodford, 1997; Woodford, 2003).

There are several subtleties here. First, in some circumstance, relative prices should change. For example, the rapid technological advances in the production of information-technology goods witnessed over the past decades mean that the prices of these goods relative to other goods and services should decline, because fewer economic resources are required for their production. Conversely, shifts in the balance between global demand for, and supply of, oil require that relative prices change to achieve an appropriate reallocation of resources--in this case, the reduced use of expensive energy. Thus, the policy prescription refers to stability of the price level as a whole, not to the stability of each individual price.

Second, the New Neoclassical Synthesis suggests that only those prices that move sluggishly, referred to as sticky prices, should be stabilized. Indeed, these models indicate that monetary policy should try to get the economy to operate at the same level that would prevail if all prices were flexible--that is, at the so-called natural rate of output or employment. Stabilizing sticky prices helps the economy get close to the theoretical flexible-price equilibrium because it keeps sticky prices from moving away from their appropriate relative level while flexible prices are adjusting to their own appropriate relative level. The New Neoclassical Synthesis, therefore, does not suggest that headline inflation, in which the weight on flexible prices is larger, should be stabilized. For example, to the extent that households directly consume energy goods with flexible prices, such as gasoline, headline inflation should be allowed to increase in response to an oil price shock. At the same time, insofar as energy enters as an input in the production of goods whose prices are sticky, stabilizing the level of sticky prices would require that the increase in energy-intensive goods prices be offset by declines in the prices of other goods.

That reasoning suggests that monetary policy should focus on stabilizing a measure of "core" inflation, which is made up mostly of sticky prices. Simulations with FRB/US, the model of the U.S. economy created and maintained by the staff of the Federal Reserve Board (Mishkin, 2007b), illustrate this point. To keep the simulations as simple as possible, I have assumed that the economy begins at full employment with both headline and core inflation at desired levels. The economy is then assumed to experience a shock that raises the world price of oil about $30 per barrel over two years; the shock is assumed to slowly dissipate thereafter. In each of two scenarios, a Taylor rule is assumed to govern the response of the federal funds rate; the only difference between the two scenarios is that in one, the federal funds rate responds to core personal consumption expenditures (PCE) inflation, whereas in the other, it responds to headline PCE inflation.6 Figure 1 illustrates the results of those two scenarios. The federal funds rate jumps higher and faster when the central bank responds to headline inflation rather than to core inflation, as would be expected (top-left panel). Likewise, responding to headline inflation pushes the unemployment rate markedly higher than otherwise in the early going (top-right panel), and produces an inflation rate that is slightly lower than otherwise, whether measured by core or headline indexes (bottom panels). More important, even for a shock as persistent as this one, the policy response under headline inflation has to be unwound in the sense that the federal funds rate must drop substantially below baseline once the first-round effects of the shock drop out of the inflation data.7

The basic point from these simulations is that monetary policy that responds to headline inflation rather than to core inflation in response to an oil price shock pushes unemployment markedly higher than monetary policy that responds to core inflation. In addition, because this policy has larger swings in the federal funds rate that must be reversed, it leads to more pronounced swings in unemployment. On the other hand, monetary policy that responds to core inflation does not lead to appreciably worse performance on stabilizing inflation than does monetary policy that responds to headline inflation. Stabilizing core inflation, therefore, leads to better economic outcomes than stabilizing headline inflation.

Although the simplest sticky-price models imply that stabilizing sticky-price inflation and economic activity are two sides of the same coin, the presence of other frictions besides sticky prices can lead to instances in which completely stabilizing sticky-price inflation would not imply stabilizing employment (or output) around their natural rates. For example, in response to an increase in productivity (a positive technology shock), the real wage has to rise to reflect the higher marginal product of labor inputs, which requires either prices to fall or nominal wages to rise for employment to reach its natural rate. If both nominal wages and prices are sticky, a policy of completely stabilizing prices will force the necessary real wage adjustment to occur entirely through nominal wage adjustment, thereby impeding the adjustment of employment to its efficient level (Blanchard, 1997; Erceg, Henderson, and Levin, 2000). Indeed, if wages are much stickier than prices, the best strategy is to stabilize nominal wage inflation rather than price inflation, thereby allowing price inflation to decline to achieve the required increase in real wages.

Fluctuations in inflation and economic activity induced by variation over time in sources of economic inefficiency, such as changes in the markups in goods and labor markets or inefficiencies in labor market search, could also drive a wedge between the goals of stabilizing inflation and economic activity (Blanchard and Galí, 2006; Galí, Gertler, and López-Salido, 2007). For example, in sectors of the economy subject to little competitive pressure, prices that firms set tend to be higher and output lower than would prevail under greater competition. Monetary policy is, of course, unable to offset permanently high markups because of the principle, mentioned earlier, that the long-run Phillips curve is vertical. However, a temporary increase in monopoly power that raises markups would exert upward pressure on prices without, at the same time, reducing the productive potential of the economy. That would, indeed, be a case of a tradeoff between stabilizing inflation and stabilizing output.

These examples narrow the degree to which the recent findings of congruence between stabilizing inflation and economic activity apply in all cases, but they do not necessarily overturn the findings. The example of sticky wages would not invalidate the view that stabilizing inflation stabilizes economic activity if wages are sticky, for example, because they are held constant in order to operate as an "insurance" contract between employers and workers (Goodfriend and King, 2001). And for many of the inefficient shocks that drive a wedge between the sustainable level of output and the level of output associated with price stability, monetary policy may be the wrong tool to offset their effects (Blanchard, 2005).

Of course, central banks at times will still face difficult decisions regarding the short-run tradeoff between stabilizing inflation and output. For example, judging from the fit of New Keynesian Phillips curves, a substantial fraction of overall inflation variability seems related to supply-type shocks that create a tradeoff between inflation and output-gap stabilization (Kiley, 2007b). But the key insight from recent research--that the interaction between inflation fluctuations and relative price distortions should lead to a focus on the stability of nominal prices that adjust sluggishly--will likely prove to have important practical implications that can help contribute to inflation and employment stabilization.

Stabilizing Inflation as a Robust Policy in the Presence of Uncertainty
The discussion so far has been based on the premise that the central bank knows the efficient, or natural, rate of output or employment. However, the natural rates of employment and output cannot be directly observed and are subject to considerable uncertainty--particularly in real time. Indeed, economists do not even agree on the economic theory or econometric methods that should be used to measure those rates. These concerns are perhaps even more severe in the most recent models, where fluctuations in natural rates of output or employment can be very substantial (for example, Rotemberg and Woodford, 1997; Edge, Kiley, and Laforte, forthcoming). Furthermore, because the natural rates in the most recent models are defined as the counterfactual levels of output and employment that would be obtained if prices and wages were completely flexible, the estimated fluctuations in natural rates generated by the research are very sensitive to model specification.

If a central bank errs in measuring the natural rates of output and employment, its attempts to stabilize economic activity at those mismeasured natural rates can lead to very poor outcomes. For example, most economists now agree that the natural unemployment rate shifted up for many years starting in the late 1960s and that the growth of potential output shifted down for a considerable time after 1970. However, perhaps because those shifts were not generally recognized until much later (Orphanides and van Norden, 2002; Orphanides, 2003), monetary policy in the 1970s seems to have been aimed at achieving unsustainable levels of output and employment. Hence, policymakers may have unwittingly contributed to accelerating inflation that reached double digits by the end of the decade as well as undesirable swings in unemployment. And although subsequent monetary policy tightening was successful in regaining control of inflation, the toll was a severe recession in 1981-82, which pushed up the unemployment rate to around 10 percent.

Uncertainty about the natural rates of economic activity implies that less weight may need to be put on stabilizing output or employment around what is likely to be a mismeasured natural rate (Orphanides and Williams, 2002). Furthermore, research with New Keynesian models has found that overall economic performance may be most efficiently achieved by policies with a heavy focus on stabilizing inflation (for example, Schmitt-Grohé and Uribe, 2007).

Conclusion
Because monetary policy has not one but two objectives, stabilizing inflation and stabilizing economic activity, it might seem obvious that those objectives would usually, if not always, conflict. As so often occurs with the "obvious," however, the impression turns out to be incorrect. The economic research that I have discussed today demonstrates, rather, that the objectives of price stability and stabilizing economic activity are often likely to be mutually reinforcing. Thus, the answer to the title of this speech--"Does stabilizing inflation contribute to stabilizing economic activity?"--is, for the most part, yes.

A key policy recommendation from the past three decades of research in monetary economics is that monetary policy makers must always keep their eye on inflation and emphasize the importance of price stability in their actions and communications. Doing so does not mean that monetary policy makers are less concerned about stabilizing economic activity. Rather, by appropriately focusing on stabilizing inflation along the lines I have outlined here, monetary policy is more likely to better stabilize economic activity.




References
Anderson, Palle, and David Gruen (1995). "Macroeconomic Policies and Growth," in Palle Anderson, Jacqueline Dwyer, and David Gruen, eds., Productivity and Growth: Proceedings of a Conference held at the H.C. Coombs Centre for Financial Studies, Kirribilli, Australia, July 10-11. Sydney: Reserve Bank of Australia, pp. 279-319.

Blanchard, Olivier (1997). "Comment on 'The New Neoclassical Synthesis and the Role of Monetary Policy,'" in Ben S. Bernanke and Julio J. Rotemberg, eds., NBER Macroeconomics Annual, vol. 12. Cambridge, Mass.: MIT Press, pp. 289-93.

Blanchard, Olivier (2005). "Comment on 'Inflation Targeting in Transition Economies: Experience and Prospects,'" in Ben S. Bernanke and Michael Woodford, eds., The Inflation-Targeting Debate. Chicago: University of Chicago Press, pp. 413-21.

Blanchard, Olivier, and Jordi Galí (2006). "A New Keynesian Model with Unemployment," unpublished paper, Universitat Pompeu Fabra.

Bodenstein, Martin, Christopher Erceg, and Luca Guerrieri (2007). "Optimal Monetary Policy in a Model with Distinct Core and Headline Inflation Rates," unpublished paper, Board of Governors of the Federal Reserve System.

Boivin, Jean, and Marc P. Giannoni (2006). "Has Monetary Policy Become More Effective?" Review of Economics and Statistics, vol. 88 (August), pp. 445-62.

Briault, Clive (1995). "The Costs of Inflation (59 KB PDF)," Bank of England Quarterly Bulletin, vol. 35 (February), pp. 33-45.

Cogley, Timothy, and Thomas J. Sargent (2001). "Evolving Post-World War II U.S. Inflation Dynamics," in Ben S. Bernanke and Kenneth Rogoff, eds., NBER Macroeconomics Annual, vol. 16. Cambridge, Mass.: MIT Press, pp. 331-73.

Cogley, Timothy, and Thomas J. Sargent (2005). "Drifts and Volatilities: Monetary Policies and Outcomes in the Post WWII US," Review of Economic Dynamics, vol. 8 (April, Monetary Policy and Learning), pp. 262-302.

Edge, Rochelle M., Michael T. Kiley, and Jean-Philippe Laforte (forthcoming). "Natural Rate Measures in an Estimated DSGE Model of the U.S. Economy," Journal of Economic Dynamics and Control.

Erceg, Christopher J., Dale W. Henderson, and Andrew T. Levin (2000). "Optimal Monetary Policy with Staggered Wage and Price Contracts," Journal of Monetary Economics, vol. 46 (October), pp. 281-313.

English, William B. (1999). "Inflation and Financial Sector Size," Journal of Monetary Economics, vol. 44 (December), pp. 379-400.

Feldstein, Martin (1997). "The Costs and Benefits of Going from Low Inflation to Price Stability," in Christina D. Romer and David H. Romer, eds., Reducing Inflation: Motivation and Strategy. Chicago: University of Chicago Press, pp. 123-66.

Fischer, Stanley (1993). "The Role of Macroeconomic Factors in Growth," Journal of Monetary Economics, vol. 32 (December), pp. 485-512.

Friedman, Milton (1968). "The Role of Monetary Policy," American Economic Review, vol. 58 (March), pp. 1-17.

Galí, Jordi, Mark Gertler, and J. David López-Salido (2007). "Markups, Gaps, and the Welfare Costs of Business Fluctuations," Review of Economics and Statistics, vol. 89 (February), pp. 44-59.

Goodfriend, Marvin (1993). "Interest Rate Policy and the Inflation Scare Problem: 1979-1992 (636 KB PDF)," Federal Reserve Bank of Richmond, Economic Quarterly, vol. 79 (Winter), pp. 1-23.

Goodfriend, Marvin (2005). "Inflation Targeting in the United States?" in Ben S. Bernanke and Michael Woodford, eds., The Inflation-Targeting Debate. Chicago: University of Chicago Press, pp. 311-37.

Goodfriend, Marvin, and Robert G. King (1997). "The New Neoclassical Synthesis and the Role of Monetary Policy," in Ben S. Bernanke and Julio J. Rotemberg, eds., NBER Macroeconomics Annual, vol. 12. Cambridge, Mass.: MIT Press, pp. 231-83.

Goodfriend, Marvin, and Robert G. King (2001). "The Case for Price Stability (477 KB PDF)," in A. Garcia-Herrero, V. Gaspar, L. Hoogduin, J. Morgan, and B. Winkler, eds., Why Price Stability? Proceedings of the First ECB Central Banking Conference. Frankfurt: European Central Bank, pp. 53-94.

Kiley, Michael T. (2007a). "Is Moderate-to-High Inflation Inherently Unstable? (390 KB PDF)" International Journal of Central Banking, vol. 3 (June), pp. 173-201.

Kiley, Michael T. (2007b). "A Quantitative Comparison of Sticky-Price and Sticky-Information Models of Price Setting," Journal of Money, Credit and Banking, vol. 39 (February, S1), pp. 101-25.

Lucas, Robert E. (1972). "Expectations and the Neutrality of Money," Journal of Economic Theory, vol. 4 (April), pp. 103-24.

Mishkin, Frederic S. (2007a). "Monetary Policy and the Dual Mandate," speech delivered at Bridgewater College, Bridgewater, Va., April 10.

Mishkin, Frederic S. (2007b). "Headline versus Core Inflation in the Conduct of Monetary Policy," speech delivered at the Business Cycles, International Transmission and Macroeconomic Policies Conference, HEC Montreal, Montreal, October 20.

Mishkin, Frederic S. (2007c). "Will Monetary Policy Become More of a Science?" Finance and Economics Discussion Series 2007-44. Washington: Board of Governors of the Federal Reserve System, September.

Orphanides, Athanasios (2003). "Monetary Policy Evaluation with Noisy Information," Journal of Monetary Economics, vol. 50 (April, Swiss National Bank/Study Center Gerzensee Conference on Monetary Policy under Incomplete Information), pp. 605-31.

Orphanides, Athanasios, and Simon van Norden (2002). "The Unreliability of Output-Gap Estimates in Real Time," Review of Economics and Statistics, vol. 84 (November), pp. 569-83.

Orphanides, Athanasios, and John C. Williams (2002). "Robust Monetary Policy Rules with Unknown Natural Rates," Brookings Papers on Economic Activity, vol. 2002 (December), pp. 63-145.

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Schmitt-Grohé, Stephanie, and Martín Uribe (2007). "Optimal Simple and Implementable Monetary and Fiscal Rules," Journal of Monetary Economics, vol. 54 (September), pp. 1702-25.

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Sims, Christopher A., and Tao Zha (2006). "Were There Regime Switches in U.S. Monetary Policy?" American Economic Review, vol. 96 (March), pp. 54-81.

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Footnotes

1. The Federal Reserve’s congressional mandate is actually couched in terms of the goals of maximum employment, stable prices, and moderate long-term interest rates. However, as I have discussed in Mishkin (2007a), the mandate is more appropriately interpreted in terms of the dual goals of price stability and maximum sustainable employment, and this formulation is what is consistent with stabilizing both inflation and economic activity.

2. I thank Michael Kiley and Thomas Laubach for their assistance and helpful comments. Note that these remarks reflect only my own views and not necessarily those of others on the Board of Governors or the Federal Open Market Committee.

3. Mishkin (2007c) outlines a set of principles that form the basis of the science of monetary policy that is currently practiced.

4. The deleterious effects of inflation on economic efficiency imply that the level of sustainable employment may even be higher at lower rates of inflation. Thus, the goals of price stability and high employment are likely to be complementary, rather than competing, and so there is no policy tradeoff between the goals of price stability and maximum sustainable employment. A further possibility is that low inflation may even help increase the rate of economic growth. Although time-series studies of individual countries and cross-national comparisons of growth rates are not in total agreement (Anderson and Gruen, 1995), the consensus has developed that inflation is detrimental to economic growth, particularly when inflation rates are high.

5. Cogley and Sargent (2001, 2005), Boivin and Giannoni (2006), and Kiley (2007a) provide evidence that monetary policy that stabilized inflation played an important role in stabilizing real activity. However, Primiceri (2005) and Sims and Zha (2006) argue that "good luck" from a reduction in the volatility of shocks was more important in stabilizing output.

6. The Taylor rule is written as follows: , where R is the nominal policy rate; r* is the equilibrium real short-term rate; is the four-quarter inflation rate, either core or headline; is the inflation target, taken to be the baseline inflation rate; and is the output gap. Under that specification, the response coefficient on each gap variable is 1.

7. The scenarios were constructed with a rule that assumes no knowledge of how long the oil price shock will last. Research done by the staff of the Federal Reserve Board using other types of models also suggests that when the persistence of shocks is uncertain, the use of core inflation rather than headline inflation in central-bank reaction functions can improve policy outcomes (Bodenstein, Erceg, and Guerrieri, 2007).

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'바이백 약발' 하루 만에 주춤 [서울=뉴스핌] 고인원 기자= 미국 국채 수익률이 20일(현지시간) 전날의 급락분 일부를 되돌리며 다시 상승했고, 미 달러화도 장 초반 약세에서 벗어나 소폭 반등했다. 미 재무부가 장기 국채시장 안정을 위해 바이백(환매) 규모를 최소 두 배로 확대하고 추가 확대 가능성까지 시사했지만, 시장에서는 미국의 재정적자와 인플레이션에 대한 우려를 해소하기에는 역부족이라는 평가가 나왔다. 특히 국제유가 상승이 인플레이션 압력을 다시 높일 수 있다는 경계감이 국채 수익률을 끌어올렸다. 미국의 국가부채가 사상 처음 40조달러를 넘어선 가운데 재무부가 장기금리 상승을 억제할 경우 재정 건전성에 대한 시장의 우려가 국채 대신 달러화 약세로 나타날 수 있다는 지적도 제기됐다. 이날 벤치마크인 미국 10년물 국채 수익률은 4.5bp(1bp=0.01%포인트) 상승한 4.698%를 기록했다. 30년물 수익률은 4.4bp 오른 5.238%, 미 연방준비제도(Fed·연준)의 통화정책 전망에 민감한 2년물 수익률은 0.9bp 상승한 4.188%를 나타냈다.  미 달러화.[사진=로이터 뉴스핌] 앞서 미 재무부는 전날 10~30년 만기 장기 국채의 유동성을 지원하기 위한 바이백 규모를 회당 최소 40억달러로 두 배 확대하겠다고 밝혔다. 미국의 재정적자 확대에 대한 우려로 장기 국채 수익률이 급등하자 시장 안정에 나선 것이다. 발표 직후 10년물과 20년물, 30년물 국채 수익률은 큰 폭으로 하락했고 글로벌 국채 매도세도 진정됐다. 그러나 하루 만에 국채 수익률이 다시 상승하면서 재무부 조치의 효과가 지속될지를 둘러싼 의문이 커졌다. 스콧 베선트 미 재무장관은 이날 CNBC와의 인터뷰에서 정부의 국채 바이백 규모가 당초 발표한 40억달러보다 더 커질 수 있다며 추가 확대 가능성을 시사했다. 그는 "국채 수익률이 기초 펀더멘털을 반영하지 않고 있다"고 말했다. 그러나 시장 반응은 제한적이었다. 매뉴라이프 인베스트먼트 매니지먼트의 미국 금리·모기지 거래 책임자인 마이클 로리지오는 베선트 장관의 발언보다는 국제유가 상승이 이날 국채 수익률 반등에 더 큰 영향을 미쳤을 가능성이 있다고 분석했다. 유가 상승이 인플레이션 압력을 높이면 연준이 더욱 매파적인 통화정책을 펼칠 수 있다는 우려가 커지기 때문이다. 도널드 트럼프 미국 대통령이 이란을 지원하는 국가를 상대로 "경제 전쟁(economic warfare)"에 나설 수 있다고 경고한 것도 시장의 인플레이션 우려를 자극했다. 미국과 이스라엘이 지난 2월 시작한 이란과의 전쟁으로 원유 공급망이 충격을 받은 가운데 국제유가 상승이 물가를 다시 밀어 올릴 수 있다는 우려가 이어지고 있다. 물가에 대한 시장의 기대도 높아졌다. 미국 5년물 물가연동국채(TIPS)의 기대인플레이션율은 전날 2.289%에서 2.338%로 상승했다. 10년물 TIPS 기대인플레이션율도 2.345%를 기록해 시장이 향후 10년간 미국의 물가상승률을 연평균 약 2.3%로 예상하고 있음을 보여줬다. 이날 실시된 90억달러 규모의 30년 만기 TIPS 입찰에서는 응찰률이 2.8배를 기록해 최근 추세와 비슷한 수준의 수요가 확인됐다. 미 노동부가 발표한 주간 신규 실업수당 청구 건수는 20만건을 소폭 웃돌며 시장 예상에 부합했다. 외환시장에서도 재무부의 바이백 정책을 둘러싼 평가가 이어졌다. 전날 바이백 확대 발표 직후 급락했던 달러화는 이날 장 초반 하락분을 만회하고 소폭 상승했다. 엔화와 유로화 등 주요 6개 통화 대비 달러화 가치를 나타내는 달러인덱스는 0.06% 상승한 98.89를 기록했다. 유로화는 0.01% 하락한 1.1676달러에 거래됐다. 유로화는 장중 한때 1.171달러까지 올라 5월 14일 이후 최고치를 기록했다. 엔화는 달러 대비 0.6% 하락한 달러당 159.12엔을 나타냈다. 달러/원 환율은 한국 시간 21일 오전 7시 기준 전장 대비 6.92% 하락한 1394.80원에 거래됐다. 시장에서는 재무부가 장기 국채 수익률 상승을 억제할 경우 미국의 재정 악화에 대한 우려가 달러화 약세로 옮겨갈 수 있다는 분석이 나온다. 장기금리가 재정적자 확대를 충분히 반영하지 못한다면 달러화 가치가 하락하면서 시장의 조정이 이뤄질 수 있다는 것이다. 이 같은 움직임은 시장에서 이른바 '통화가치 희석 거래(debasement trade)'로 불린다. 정부 부채 확대와 통화가치 하락에 대비해 투자자들이 금이나 비트코인 등 대체 가치저장 수단으로 이동하는 거래를 의미한다. CIBC 캐피털마켓의 세라 잉 외환전략 책임자는 "이는 베선트 장관이 시장을 시험하고 시장이 이에 맞서고 있는 것"이라며 "앞으로 이런 발표가 더 나올 수 있지만 적어도 현재로서는 시장이 이를 그다지 신뢰하는 것 같지 않다"고 말했다.   시장에서는 연준의 향후 금리 경로에도 관심이 집중되고 있다. 전날 공개된 7월 연방공개시장위원회(FOMC) 의사록에서는 인플레이션에 대한 연준 내부의 우려가 한층 커진 것으로 나타났다. '여러' 정책위원들이 금리 인상에 나설 준비가 돼 있었으며 '많은' 위원들은 인플레이션이 연준의 목표인 2%를 향해 둔화하지 않을 경우 금리를 올릴 필요가 있다고 판단했다. 금리선물 시장은 현재 연준이 9월 기준금리를 인상할 가능성을 약 35% 반영하고 있으며, 12월까지 한 차례 이상 금리가 인상될 가능성은 67%로 보고 있다. 투자자들은 이달 말 잭슨홀 심포지엄에서 예정된 케빈 워시 연준 의장의 연설에서 향후 통화정책에 대한 추가 단서가 나올지 주목하고 있다. 암호화폐 시장에서는 비트코인이 5% 상승한 7만2524.54달러까지 오르며 6월 1일 이후 최고치를 기록했다. 재정적자 확대와 통화가치 희석에 대한 우려가 이어지는 가운데 대체 가치저장 수단에 대한 수요가 다시 부각됐다. koinwon@newspim.com 2026-08-21 07:08
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'동전주 상폐' 중견기업들 비상 [서울=뉴스핌] 이석훈 기자 = 동전주 퇴출 우려가 현실화하면서 중견기업 오너들이 주가와 시가총액 방어에 안간힘을 쓰고 있다. 주주환원 확대는 물론 유상증자와 주식병합 등 다양한 수단을 동원해 주가 부양과 상장 유지에 나서는 모습이다. 하지만 전문가들은 주식병합 등 단순한 주당 가격 인상만으로는 상장폐지 위험을 근본적으로 해소하기 어렵다고 지적한다. 결국 실적 개선을 통한 기업가치 제고와 시가총액 확대가 뒤따르지 않으면 상장 유지 요건을 충족하기 어려울 수 있다는 분석이다. ◆ 상폐 위기 몰린 중견기업, 주식병합·자사주 매입으로 전방위 방어 21일 업계에 따르면 거래소의 상장 유지 요건 강화로 퇴출 위기에 몰린 중견기업들이 주식병합과 주주환원 등 주가 방어책 마련에 사활을 걸고 있다. 그러나 단기적인 가격 인상이라는 임시방편만으로는 한계가 명확한 만큼, 실적 개선과 시가총액 증대가 수반되지 않으면 상장폐지를 면하기 어렵다는 지적이 나온다. [AI 인포그래픽=이석훈 기자] 퇴출 위기에 몰린 기업들이 가장 빠르게 꺼내 든 카드는 주식병합이다. 여러 주식을 하나로 합치면 기업가치나 시가총액 변동 없이 주당 가격을 병합 비율만큼 높일 수 있기 때문이다. 실제로 이번에 관리종목 지정 대상이 된 36개 종목 가운데 15개는 주식병합을 예고했다. 한화투자증권에 의하면 상장폐지 개혁안이 발표된 지난 2월 12일부터 이달 12일까지 추진된 액면병합은 276건으로, 이는 전년 동기 대비 23배 급증한 수준이다. 업계 관계자는 "액면가 500원, 주가 300원인 기업이 액면가를 2000원으로 병합하면 주가가 1200원이 되면서 동전주 요건을 피할 수 있다"며 "정부가 상장폐지 개혁 방안에 동전주 요건을 신설하면서, 이를 피하고자 많은 기업들이 주식병합을 단행하고 있다"고 말했다. 상장유지 시가총액 기준에 대응하기 위한 증자도 주요 수단으로 꼽힌다. 당초 2027년 200억원, 2028년 300억원으로 상향 예정이던 코스닥 시총 기준은 제도 개편에 따라 2026년 7월 200억원, 2027년 1월 300억원으로 가용 시점이 조기 적용됐다. 플레이그램처럼 증자를 통해 자본을 확충하려는 시도가 이어지는 가운데, 조달한 자금이 실제 사업 성과와 현금창출력 개선으로 이어질 수 있는지가 상장 유지의 관건이다. 주주환원 확대 역시 오너들이 선택하는 주요 방어 수단이다. 티쓰리는 오너 일가 주도로 2026년부터 2028년까지 총주주환원율 50%를 목표로 제시하며 자본 효율성 제고를 공식화했다. 자사주 매입과 배당 확대는 주주 가치를 높여 시장의 저평가 인식을 해소하는 데 유용한 카드가 된다. 특히 지배주주가 승계 과정까지 고려해 특정 시기에 자사주 매입과 배당을 집중할 경우, 주가 방어와 지배구조 안정화를 동시에 노린 포석으로 풀이된다. 한 중견기업 관계자는 "상장폐지 기준이 강화되면서 퇴출 위기에 몰린 기업들이 주식병합이나 증자, 자사주 매입 등 활용할 수 있는 방안을 다각도로 동원해 주가와 시가총액 방어에 나서고 있다"고 설명했다. ◆ "주식병합만으론 상폐 못 면해"…체질 개선·실질 대책 시급 문제는 이러한 조치가 실질적인 체질 개선으로 이어지지 않을 때다. 주식병합은 기업가치를 바꾸지 못하고, 증자는 지분 희석과 재무 부담을 키울 수 있다. 배당과 자사주 매입 역시 이익과 현금흐름이 뒷받침되지 않으면 일회성 부양책에 그친다는 한계가 뚜렷하다. 이에 업계에서는 단기적인 주가 부양보다 지속 가능한 수익 구조 확보가 시급하다고 지적한다. 근본적인 원인을 해결하지 않은 채 장부상 자본만 늘리는 조치는 임시방편에 불과한 만큼, 비용 절감과 사업 재편 등 실질적인 체질 개선이 병행돼야 한다는 제언이다. 업계 관계자는 "주식병합을 실시하더라도 시가총액에는 영향을 미치지 않기 때문에 상장폐지에서 자유로울 수 없다"며 "더구나 정부가 일시적 주가 부양을 통해 상폐를 회피할 수 없도록 세부 적용 기준과 시장 감시를 강화한다는 방침이기 때문에 추가적인 대책이 필요한 상황"이라고 말했다. 김대종 세종대학교 경영학부 교수도 "주식 병합만으로는 상폐를 면하기 어렵다는 것은 잘 알려진 사실"이라며 "대주주의 출자나 자사주 매입 및 소각 등을 통해 주식 가치를 올려야 할 것"이라고 설명했다. stpoemseok@newspim.com 2026-08-21 06:00
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