Volumen 27, Serie Banca Central: Changing Inflation Dynamics, Evolving Monetary Policy


Empirical models have failed to explain inflation behavior over the last 20 years in most developed economies. The unusual inflation dynamics—the ‘missing deflation’ during recessions and the ‘missing inflation’ during recoveries—points to a failure of Phillips curve predictions. Several hypotheses have been proposed to explain the ‘twin puzzle’ phenomenon while at the same time have imposed challenging implications to conduct monetary policy. It is of utmost importance to understand the challenges for monetary policy conduct in an environment where inflation dynamics is hard to unravel. This volume contributes to the study of the ‘twin puzzle’ phenomenon and the challenges facing monetary policy. It gathers a selective group of distinguished scholars and policy makers to discuss the latest academic findings on inflation dynamics. 


Gonzalo Castex 
Jordi Galí 
Diego Saravia



Understanding the dynamics of inflation is one of the most important challenges that macroeconomists face. The long period of declining unemployment combined with persistently low inflation has proved a puzzle for traditional macroeconomic frameworks. This outstanding collection of papers digs deeply into the issue, providing refreshing new insights, both empirical and theoretical. The volume is a must read for anyone interested in researching inflation dynamics, as well as policy makers interested in knowing the state of the art on the subject. I recommend it enthusiastically.

Mark Gertler
Henry and Lucy Moses Professor of Economics at New York University


This book was ahead of its time in tackling a key issue that continues to puzzle policymakers and academics: why has inflation remained muted despite sharp falls in unemployment? The chapters explore a wide range of hypotheses and draw on the diverse country experience from an impressive group of authors. Their analysis provides important new insights and explores several theories that have previously received little attention —some of which appear to go some way to resolving the “missing inflation” puzzle.

Kristin J. Forbes
Jerome and Dorothy Lemelson Professor of Management and Global Economics at MIT’s Sloan School of Management


Recent inflation dynamics have been a major puzzle for academics and policymakers. Missing disinflation during the Great Recession, an apparently weakened Phillips curve, missing inflation in the aftermath of the Global Financial Crisis are just some of the riddles. In the “Changing Inflation Dynamics, Evolving Monetary Policy” volume, world-class scholars give their expert takes and shed new light on these issues. Methodological diversity, creative thinking, and lucid presentation are the hallmarks of this volume.

Yuriy Gorodnichenko
Quantedge Presidential Professor of Economics at University of California, Berkeley