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Inflation and the Scariest Economics Paper of 2022 [1]

['Jason Furman']

Date: 2023-08

A Now Hiring sign in Orlando, Fla., April 17, 2021. Photo: Paul Hennessy/Zuma Press

The scariest economics paper of 2022 argues that labor markets remain extremely tight, underlying inflation is high and possibly rising, and several years of very high unemployment may be necessary to get inflation under control. The paper is a painstaking empirical exploration by Johns Hopkins macroeconomist Larry Ball with co-authors Daniel Leigh and Prachi Mishra of the International Monetary Fund released by the Brookings Papers on Economic Activity. It shows why the Federal Reserve will likely need to maintain its war on inflation, even if unemployment continues to rise.

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[1] Url: https://www.wsj.com/articles/the-scariest-economics-paper-of-2022-federal-reserve-interest-rates-median-inflation-unemployment-labor-market-job-openings-11662582326

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