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The Outlook for Inflation

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The behavior of final product prices since 1980 has been consistent with price models used by mainstream economists. Final product prices fall, or at least grow more slowly, during recessions and do not increase significantly during the first year of economic recovery. According to economists K.J. Kowalewski and Michael E. Bryan, current estimates of economic activity and capacity output suggest that these prices should not grow significantly faster in 1984. The inflation outlook for 1985 is less certain, however, because the future course of monetary and fiscal policies and possible errors in our measures of capacity output are unknown.

Suggested citation: Kowalewski, K. J., and Michael E. Bryan. “The Outlook for Inflation,” Federal Reserve Bank of Cleveland, Economic Review, vol. 20, no. 1, pp. 07-22, 03.01.1984.

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