In the last article of his prolific career, the late Marvin Goodfriend, who held the Allan H. Meltzer Professorship of Political Economy at Carnegie Mellon's Tepper School of Business and was a lifelong student of inflation and central bank policy, identified a subtle yet significant factor contributing to fluctuations in inflation and employment rates. This factor is the discretionary decision-making by central banks, combined with economic agents trying to forecast both the central bank's actions and the forecasts of their peers.
