The empirical literature on the transmission of monetary policy to inflation in Italy has stressed the importance of … the exchange rate and, to some extent, of the demand channel; recently, the roles of inflation expectations and the fiscal … situation have been emphasized. This paper uses vector auto-regression to address this issue. The results suggest that inflation …

level, after controlling for inflation expectations, and whether it is concentrated among those firms that are more exposed …

Since 2013 the inflation rate in the euro area has fallen steadily, reaching all-time lows at the end of 2014. Market …-based measures of inflation expectations (such as inflation swaps) have also declined to extremely low levels, which suggests … increasing concern about the credibility of the ECB in maintaining price stability. Inflation releases have often surprised …

We explain why the macroeconomic effects of shocks to inflation of the same size, but opposite sign, are not … necessarily symmetric. All in all, the costs of deflation and disinflation tend to exceed those of inflation due to the presence … borrowing limits. When these constraints are binding, they can prevent monetary policy from closing the inflation gap, labor …

Even low levels of trend inflation substantially affect the dynamics of a basic new Keynesian DSGE model when monetary … policy is conducted by a contemporaneous Taylor rule. Positive trend inflation shrinks the determinacy region. Neither the … Taylor principle, which requires the inflation coefficient to be greater than one, nor the generalized Taylor principle …

monetary strategy takes the form of an inflation cap. Rules featuring an inflation cap are not only justified on theoretical … explicit bounds on inflation, they seem better suited to restrain expectations from drifting significantly away from target …, a bias toward conservativeness arises. Second, a policy that involves a cap on inflation is helpful in reducing output …