The sovereign debt crisis has made it clear that central banking is more than keeping inflation low. Central banks are … equilibria by self-fulfilling fears of liquidity crises in a monetary union. I also survey the different arguments that have been …

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. …

This paper employs a stylized New Keynesian DSGE model for a monetary union to analyze whether cyclical inflation … the fraction of borrowers and to a lesser extent the loan-to-value ratio - generate inflation differentials that are … characteristics of financial markets should be seen as a possible alternative explanation for the observable inflation dispersion in …

matrix and averages model estimates across all data releases. Using standard forecasting and policy models to analyze … monetary authorities’ reaction functions, we show that this simple method can improve forecasting performance and provide …

’ inflation aversion and exit costs. …