to be known as ‘the opportunistic approach to disinflation’. The implied policy rule is non-linear and path … disinflation, as well as the stochastic steady-state distributions of inflation and output under opportunistic versus linear policy …

disinflation under inflation targeting policies. The analysis is motivated by the disinflation performance of many inflation …-targeting countries, in particular the gradual Chilean disinflation with temporary annual targets. At the start of the disinflation … adaptive learning lowers the cost of disinflation. This reduction can be exploited by a gradual approach to disinflation. Firms …

forecast the risks of worldwide deflation for horizons of up to two years. Although recently fears of worldwide deflation have … increased, we find that, as of September 2002, with the exception of Japan, there is no evidence of substantial deflation risks …. We also put the estimates of deflation risk for the United States, Germany and Japan into historical perspective. We find …

The Friedman rule states that steady-state welfare is maximized when there is deflation at the real rate of interest …. Recent work by Khan et al. (2003) uses a richer model but still finds deflation optimal. In an otherwise standard new …