Armenter, Roc; Bodenstein, Martin - Federal Reserve Bank of New York - 2005
. We find that for all parametrizations with an equilibrium inflation rate of about 2 percent, there is a second … equilibrium with an inflation rate just above 10 percent. Thus, the model can simultaneously account for the low and high … inflation episodes in the United States. We carefully characterize the set of Markov equilibria along the parameter space and …