The physiology of disinflation So to sum up: falling energy and food prices, coupled with the effects of relative price adjustment in stressed countries, explain almost fully the disinflation we have seen in the euro area. We also see that disinflation produces counterveiling forces, which may in time cause it to self-correct. To what extent should monetary policy therefore react to these developments?
Policies for a communications era - a local perspective This perspective on economic policy extends beyond the establishment of the national monetary policy that occupies much of my time. A popular bumper sticker says, “Think Globally, Act Locally.” Good advice. Indeed, this simple maxim describes one of the great strengths of the Federal Reserve System.