Research Discussion Paper – RDP 2024-05 Sign Restrictions and Supply-demand Decompositions of Infation

Contents

• Introduction
• SVAR and Decompositions
• What Do Sign Restrictions Tell Us about Decompositions?
• Supply-demand Decompositions of US Inflation
• Conclusion
• Appendix A: Inference about Decompositions
• Appendix B: Additional Empirical Results
• References

I thank Benjamin Beckers, Anthony Brassil, Robin Braun, Thomas Cusbert, Jonathan Hambur, Jarkko Jääskelä, Genevieve Knight, Gabriela Nodari, John Simon, Nick Stenner, Benjamin Wong, Anirudh Yadav and seminar participants at the University of Adelaide for helpful comments. The views expressed in this paper are those of the author and should not be attributed to the Reserve Bank of Australia. Any errors are the sole responsibility of the author.