This chapter examines the concept of inflation persistence in macroeconomic theory. It begins by defining persistence … persistence from the literature on imperfect information models, learning models, and so-called “trend inflation models …

desirable as they hinder the ability of governments to smooth distortions. Allowing for the effective use of inflation during …

In recent years, inflation in the euro area has failed to decelerate decisively while cyclical slack built up in the … analysis conducted on two decades of quarterly data covering 17 countries yields a yes on both counts. First, inflation is …

This chapter reviews the theory of optimal monetary stabilization policy in New Keynesian models, with particular …

The fiscal theory states that inflation adjusts so that the real value of government debt equals the present value of … fiscal theory to interpret historical episodes, including the rise and fall of inflation in the 1970s and 1980s, the long … pegs, the ends of hyperinflations, currency crashes, and the success of inflation targets. Going forward, fiscal theory …

resilient to external shocks. Enhancing the credibility of the inflation target would provide the monetary authorities with more …. Améliorer la crédibilité de l’objectif d’inflation donnerait aux autorités monétaires plus de latitude pour réagir aux chocs …

economies. The general findings for monetary policy are that, while it was costly to lower inflation (in terms of output and … inflation further from its already low level. While inflation was being lowered, in a number of cases central banks were also … evidence that these changes have helped in terms of better anchoring inflation expectations. At the same time there is no firm …