Former Fed Gov. Mishkin: Inflation Expectations Low

The transcript discusses the relationship between full employment, wage gains, and inflation expectations. It highlights the challenges faced by central banks, including the Federal Reserve, in managing inflation targets. The discussion includes the concept of 'inflation phobia' and the need for a flexible approach to inflation targeting. The transcript also addresses the difficulties central banks encounter in generating inflation and suggests that a more adaptable policy could be beneficial.

Why might central banks consider targeting a price level instead of a percentage increase?

What implications does a prolonged period of inflation undershooting have for monetary policy?