BIS paper lays out ‘two-regime’ model of inflation

Framework could help central banks recognise and respond to bouts of higher inflation

Claudio Borio
Claudio Borio

The Bank for International Settlements offers up a new model of the inflation process in a paper published on March 20, which could help central banks deal with overheating economies.

At its heart, the model includes a self-reinforcing transition that can move an economy from a low-inflation regime to a high one. Once high inflation becomes embedded, it can be hard for a central bank to move back to the low-inflation state.

But it also emphasises that inflation can be self-stabilising when it

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Central Banking? View our subscription options

Register for Central Banking

All fields are mandatory unless otherwise highlighted

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account