This post presents an updated estimate of inflation persistence, following the release of personal consumption expenditure (PCE) price data for December 2022. The estimates are obtained by the Multivariate Core Trend (MCT), a model we introduced on Liberty Street Economics last year and covered most recently in a January post. The MCT is a dynamic factor model estimated on monthly data for the seventeen major sectors of the PCE price index. It decomposes each sector’s inflation as the sum o...| Liberty Street Economics
This post presents an update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since September 2022.| Liberty Street Economics
Argia Sbordone is the head of Macroeconomic and Monetary Studies. Her research is in the field of macro and monetary economics, with a focus on the analysis of business cycle fluctuations. Her work includes studies of productivity fluctuations, wage and price dynamics, and inflation persistence. Her current research focuses on monetary policy and inflation dynamics. Ms. Sbordone received her Ph.D. from the University of Chicago. She has taught at Princeton University and at Rutgers University.| www.newyorkfed.org
The surge in inflation since early 2021 has sparked intense debate. Would it be short-lived or prove to be persistent? Would it be concentrated within a few sectors or become broader? The answers to these questions are not so clear-cut. In our view, one should ask how much of the inflation is persistent and how much of it is broad-based. In this post, we address this question through a quantitative lens. We find that the large ups and downs in inflation over the course of 2020 were largely th...| Liberty Street Economics
