Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

One test is whether in previous periods of financial stress like this, we saw what might be more upward inflation pressure than we otherwise could explain or productivity performance that we had trouble explaining. After looking at the experience during the early 1990s in the headwinds period and trying to think about the likely magnitude of the effects of such a productivity shock coming out of the financial system, we decided that you could see a negative productivity shock of that sort going on but that its effects are overwhelmed by the fallout from its effect on demand. So although there might be some negative productivity shock, on net it turns out to be more of a disinflationary effect. But we also had difficulty seeing it show up in productivity data. That said, that would be extremely hard for us to find. You know, it could be there, and we just couldn’t find it.

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