economic performance under inflation targets, and arguments that the flexible exchange rate has undermined real economic …

, and Slovakia) using GARCH and TARCH models between 1999 and 2006. Despite these countries adopted inflation targeting …

—with excess liquidity reminiscent of the global inflation generated by the weak dollar in the 1970s. …

benefits of a commitment to a peg, domestic and foreign inflation (aversion), as well as business cycle volatility and …

value. We show that local interactions and serial correlation of aggregate demand shocks play a key role in generating those …

In a standard New Keynesian model, a myopic central bank concerned with stabilizing inflation and changes in the output … stabilizing output gap changes, the central bank imparts inertia into output and inflation that is absent under pure discretion … social outcomes if it focuses on inflation and changes in the output gap than are achieved under inflation targeting. …

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. …

stronger bargaining position when they try to prevent a cut in money wages. If inflation is so low that some money wages have … to be cut, workers‘ stronger bargaining position requires higher unemployment in equilibrium. However, inflation is more … stable when money wage rigidity binds, providing an incentive for monetary policy makers to choose a low target for inflation …

independence and inflation. Making use of data on the evolution of central bank independence over time and controlling for possible … country’s inflation performance. Examining a cross-section of up to 69 countries, we are able to show that granting a central … bank more autonomy does not necessarily lead to better inflation performance. To lower inflation by increasing independence …