situation poses to price stability. We propose to regard the central banker as a risk manager who aims to contain inflation … within pre-specified bounds. We develop formal tools of risk management that may be used to quantify and forecast the risks … of failing to attain that objective. We illustrate the use of these risk measures in practice. First, we show how to …

Motivated by policy statements of central bankers, we propose to regard the central banker as a risk manager who aims … at containing inflation and the deviation of output from potential within pre-specified bounds. We develop formal tools … of risk management that may be used to quantify the risks of failing to attain that objective. Risk measures inherently …

Countries that have pursued distortionary macroeconomic policies, including high inflation, large budget deficits and …

Some channels through which increased inflation tends to reduce economic growth, and vice versa, are studied within a … potential impact of inflation on: (a) saving through real interest rates (or uncertainty); (b) the income velocity of money; (c …) the government budget deficit through the inflation tax and tax erosion; and (d) efficiency in production through the …

This paper reconsiders the relationship between inflation, economic growth and external debt, and discusses various … channels through which (a) increased inflation tends to reduce growth and raise foreign indebtedness over time and (b …) declining growth tends to amplify both inflation and debt. Based on a simple model of the simultaneous determination of …

, future inflation rates, and future currency depreciation rates. They separate market expectations for the short, medium and …

inflation and real interest rates in Germany, using monthly data from the first quarter of 1967. The central results are two …-fold. First, the interest rate spreads considered contain considerable information about future changes in inflation, but no …- and two-year rates, for instance) appears to be the most informative for future inflation. These results are similar to …

Survey data on household expectations of inflation are routinely used in economic analysis, yet it is not clear to what … recovering households' implicit expectations of inflation from their consumption expenditures. We show that these implicit … expectations have predictive power for CPI inflation. They are better predictors of CPI inflation than survey responses, except for …

Forward interest rates have become popular indicators of inflation expectations. The usefulness of this indicator … depends on the relative volatility and the correlation of inflation expectations and expected real interest rates. This paper … expected real interest rate add to the inflation expectations is balanced by a tendency for expected real interest rates and …

how central bank preferences (and thereby monetary policy) affect the relation between nominal interest rates, inflation … estimated by maximum likelihood on quarterly US data. The policy experiments include stronger inflation targeting, more active …