Keynesian model we show that, if households have hyperbolic discounting, small positive rates of inflation can be optimal. In … our baseline calibration, the optimal rate of inflation is 2.1% and remains positive across a wide range of calibrations. …

announcing a quantified inflation objective, other forms of communication, or by publishing central banks’ inflation and output … (economic) transparency, and given our findings that disagreement among inflation expectations in the general public is not …

and conservativeness, the literature on optimal inflation contracts is discussed, followed by research in which the … are reviewed. We conclude that the negative relationship between CBI and inflation is quite robust. …

institutions. Such an arrangement is inferior to an optimal inflation targeting, or a Rogoff-style central banker, whose optimal …

Inflation targeting has become the monetary policy framework of the nineties. At the other extreme, several central … banks have recently adopted key elements of the inflation targeter's toolkit, but at the same time they have made formal … declarations that they are not inflation targeters. Such a position may appear surprising. It indirectly suggests that a reneging …

The paper provides an empirical analysis of inflation persistence in one of inflation targeting countries, the Czech …, display smaller inflation persistence than durables and processed goods. Inflation seems to be somewhat less persistent after … the adoption of inflation targeting in 1998. There is also evidence for aggregation bias, that is, aggregate inflation is …

This Paper argues that inflation-targeting central banks should announce explicit loss function with numerical relative … inflation and output-gap forecasts. Simple voting procedures for forming the Monetary Policy Committee’s aggregate loss function … inflation targeting and eliminates some misunderstandings of the meaning of ‘flexible’ inflation targeting. Using time …

Monetary policy is sometimes formulated in terms of a target level of inflation, a fixed time horizon and a constant …

macroeconomic behaviour. Inflation targeting is compared to the welfare maximizing monetary rule and to a fixed nominal exchange … rate. It is found that flexible inflation targeting produces too little exchange rate volatility compared to the optimal … rule but delivers higher welfare than a fixed nominal exchange rate. Strict inflation targeting also delivers higher …

), (3) the inflation tax (the reduction in the real value of the stock of base money due to inflation and (4) the operating … inflation target, and the importance of cooperation and coordination between the Treasury and the Central Bank when faced with …