摘要：The impact of inflation on relative price variability (RPV) is an important
channel for real effects of inflation. With a view to the recent debate on the
Federal Reserve's implicit lower and upper bounds of its inflation objective, we
introduce a modified version of Hansen's panel threshold model to explore the
inflation-RPV linkage in U.S. cities. We find two significant inflation
thresholds and both positive and negative effects of inflation on RPV. The
smallest effect of inflation on RPV is ensured if inflation is low but well
above zero. If monetary policy aims at minimizing inflation's impact on relative
prices, our estimates suggest that U.S. inflation should range between 1.8
percent and 2.8 percent.
