this phenomenon, which has been observed for several other countries, may be due to a change in the behaviour of inflation …. Specifically, moving from a high to a low-inflation environment has reduced the expected persistence of cost changes and, by … policy has responded more aggressively to inflation deviations over the low pass-through period relative to the high pass …

are already high. By contrast, upward pressures on output (and perhaps also on inflation) should lead to decreases in …, responding to future inflation, rather than the current rate, does not generate significant welfare improvements. While some of … should lower rates when output or inflation is pushing upward is more specific to limited-participation models. This …