2025-06-02-世界银行-利率周期的权衡_活动_通货膨胀和价格水平（英）_73页_2mb

Tradeoffs over Rate Cycles: Activity, Inflation and the Price Level

Summary:
This paper examines the tradeoffs faced by central banks in adjusting monetary policy, focusing on interest rate cycles from 1970 to 2024 across 24 advanced economies. It highlights the post-pandemic tightening period, characterized by a delayed start (novel) followed by aggressive interest rate hikes. A delayed start reduces output losses but increases the price level sharply. Aggressive tightenings may mitigate price level increases but increase output losses. Central bank credibility, as measured by various indicators (transparency, turnover, etc.), is the key institutional feature with no tradeoff, associated with better outcomes across variables. However, the post-pandemic adjustment, despite historically low output losses per inflation reduction (Sacrifice Ratios) and significant disinflation, incurred substantial price level increases, which remain largely unaccounted for in central bank frameworks. The Price-Output Tradeoff Ratio (POTR) captures the share of adjustment through price level increases versus output losses, which was notably higher post-pandemic. Delays in liftoff and aggressiveness strategies contribute differently to tradeoffs, with credibility offering partial offset. These findings underscore the need for central banks to incorporate cumulative price level impacts into policy decisions without abandoning inflation targeting.

Tradeoffs and Sacrifice: Activity, Inflation and the Price Level

Summary:
This paper explores tradeoffs in monetary policy during tightening phases, with particular focus on the post-pandemic period (2020–2024). It documents significant changes in central bank strategies (timing and aggressiveness of rate hikes) and cross-country variations. Central banks faced a new dilemma: low output losses and large disinflation coexisted with massive price level increases, a phenomenon not captured in traditional metrics like the Sacrifice Ratio. The Price-Output Tradeoff Ratio reveals that most of the post-pandemic macroeconomic adjustment occurred through price level increases, whereas historically tighter phases distributed the adjustment between prices and output. Regression analyses confirm that credibility reduces tradeoffs, but delays in liftoff lead to tradeoffs where low output losses come at the expense of high price increases. Aggressive tightenings increase output losses but achieve lower price increases. These asymmetries highlight the need to balance price level and output consequences in policy frameworks, independent of inflation targeting.