ARE Professor Jens Hilscher and Coauthors Post Working Paper and Launch Website Showing Monthly Probability of Persistent Elevated Inflation (Inflation Disasters) in the U.S. and the Eurozone

Faculty
Research Spotlights

April 14, 2022

The 5y5y inflation—expected inflation for the five-year period starting in five years—is a common measure of long-run inflation. Hilscher, Raviv and Reis's new paper "How likely is an inflation disaster?" develops the methods to measure the likelihood of long-run inflation above 4% or 5%. The authors show that the likelihood of annual inflation above 4% or 5% has risen considerably in 2022. The authors’ website summarizing their findings is available here.