Economics
'Deflationary Bias' May Afflict U.S. Economy, Fed Paper Says
- Research provides `cautionary tale` for policy makers
- Achieving Fed's 2% price goal may be harder after recession
This article is for subscribers only.
The U.S. economy may be saddled with a "deflationary bias" after the last recession that makes it harder for the Federal Reserve to achieve its 2 percent inflation goal, according to research published this month by the central bank.
Economists Timothy Hills, Taisuke Nakata and Sebastian Schmidt argue that the bias stems from a recognition by companies that the Fed has limited ability to spur the economy when interest rates are low.