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New perspectives on inflation

Total Cost €


EC-Contrib. €






Project "INFL" data sheet

The following table provides information about the project.


Organization address
address: Houghton Street 1
city: LONDON
postcode: WC2A 2AE

contact info
title: n.a.
name: n.a.
surname: n.a.
function: n.a.
email: n.a.
telephone: n.a.
fax: n.a.

 Coordinator Country United Kingdom [UK]
 Project website
 Total cost 1˙568˙276 €
 EC max contribution 1˙568˙276 € (100%)
 Programme 1. H2020-EU.1.1. (EXCELLENT SCIENCE - European Research Council (ERC))
 Code Call ERC-2015-CoG
 Funding Scheme ERC-COG
 Starting year 2016
 Duration (year-month-day) from 2016-07-01   to  2021-06-30


Take a look of project's partnership.

# participants  country  role  EC contrib. [€] 


 Project objective

The research in this proposal will contribute to our knowledge of the dynamics and effects of inflation through the perspective of risk-adjusted inflation and valuation formulas. The goal is to provide new perspectives on inflation and its impact on resource constraints.

The first step in this work is to collect new data on inflation options and use them to construct marginal densities for risk-neutral inflation at different horizons. Because there are data for both cumulative and annual inflation, I propose a new non-parametric estimator of the joint distribution of inflation. This provides a new take on inflation dynamics and the anchoring of inflation expectations.

The second step is to use these densities as discount factors to price nominal claims. Applying these to the assets and liabilities of a central bank gives a measure of the fiscal capacity of the central bank and the impact of a higher inflation target.

The third step combines the densities for inflation with nominal interest rates to gauge how much society dislikes inflation. The risk-neutral densities give inflation strips that reveal how much markets would be willing to pay to eliminate inflation risk.

The fourth step is to design inflation-indexed bonds that allow countries to self-insure in a currency union. Understanding how the value and payments of these bonds changes with different measure of inflation, a country can insure itself against some of the shocks that affect its real exchange rate.

The fifth step is to design new liabilities of the central bank that allow for a better control of inflation. By issuing inflation-indexed reverses and maintaining the commitment to redeem them one-to-one for currency at all date, the central bank can control inflation.

All together, these different projects aim to deepen our understanding of inflation, by focusing on modeling risk-adjusted inflation, to answer old questions and suggest new approaches in monetary economics.


year authors and title journal last update
List of publications.
2016 Ricardo Reis
Funding Quantitative Easing to Target Inflation
published pages: , ISSN: , DOI:
Designing Resilient Monetary Policy Frameworks for the Future, Jackson Hole Economic Policy Symposium 2019-06-18
2018 Ricardo Reis
Is something really wrong with macroeconomics?
published pages: 132-155, ISSN: 0266-903X, DOI: 10.1093/oxrep/grx053
Oxford Review of Economic Policy 34/1-2 2019-06-18
2018 N. Gregory Mankiw, Ricardo Reis
Friedman\'s Presidential Address in the Evolution of Macroeconomic Thought
published pages: 81-96, ISSN: 0895-3309, DOI: 10.1257/jep.32.1.81
Journal of Economic Perspectives 32/1 2019-06-18
2017 Ricardo Reis
published pages: 198-207, ISSN: 0889-3365, DOI: 10.1086/690249
NBER Macroeconomics Annual 31/1 2019-06-18
2016 Ricardo Reis LSE
published pages: 245-256, ISSN: 0889-3365, DOI: 10.1086/685958
NBER Macroeconomics Annual 30/1 2019-06-18
2017 Ricardo Reis
QE in the Future: The Central Bank’s Balance Sheet in a Fiscal Crisis
published pages: 71-112, ISSN: 2041-4161, DOI: 10.1057/s41308-017-0028-2
IMF Economic Review 65/1 2019-06-18
2017 Miles, David and Panizza, Ugo and Reis, Ricardo and Ubide, Ángel
And yet it moves: inflation and the great recession
published pages: , ISSN: , DOI:
2017 Markus K. Brunnermeier, Sam Langfield, Marco Pagano, Ricardo Reis, Stijn Van Nieuwerburgh, Dimitri Vayanos
ESBies: safety in the tranches
published pages: 175-219, ISSN: 0266-4658, DOI: 10.1093/epolic/eix004
Economic Policy 32/90 2019-06-18
2018 Ricardo Reis
Can the Central Bank Alleviate Fiscal Burdens?
published pages: , ISSN: , DOI:
2018 Ricardo Reis
Central Banks Going Long
published pages: , ISSN: , DOI:
Monetary Policy and Financial Stability: Transmission Mechanisms and Policy Implications 2019-08-05
2018 Ricardo Reis
\"Comment on \"\"Michelson-Morley, Fisher, and Occam: The Radical Implications of Stable Quiet Inflation at the Zero Bound\"\"\"
published pages: 246 - 260, ISSN: , DOI:
NBER Macroeconomics Annual 2017 32, 246-260, May 2018 2019-04-20

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