Readings:

For a view that zero inflation is a bad goal for monetary policy see the article by Paul Krugman "Stable prices and fast growth: just say no".

The Fed's Chairman (Greenspan) view on the current U.S. macro outlook, price stability and NAIRU are presented in a recent speech he gave in December 1996.

For two contrarian views arguing that the the emphasis on low inflation is leading the economy to grow below its long-term potential rate and that NAIRU is lower than the current unemployment rate see an article by Robert Eisner and an article by Lester Thurow.

For a Wall Street view on the risk of resurging inflation see the comments of Stephen Roach, chief economist at Morgan Stanley and leading proponent of the view that the inflation rate will increase in 1997 and that the Fed concern about this will lead to a tightening of monetary policy in 1997 and a fall in the bond market. Two other similar comments from the Morgan Stanley Global Economic Forum and Global Economic Forum .