Research

The contribution of monetary policy to disinflation

Pongpitch Amatyakul, Fiorella De Fiore, Marco Lombardi, Benoit Mojon and Daniel Rees, Bank for International Settlements (BIS Bulletin No 82) · 2023

Did rate hikes bring inflation down, or did supply shocks simply fade? Interviewers in macro, rates and research roles ask exactly this, and this bulletin gives a careful two-sided answer.

• Macro and rates

1 idea from this research

• ArgumentMacro and rates

  Did rate hikes bring inflation down, or did the shocks fade? The careful answer is both

  Supply shocks faded on their own; the hikes anchored expectations so the fading could happen. Credit both, in that order.

  Macro and rates interviews, and any debate about central bank credibility.