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. …

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. …

actually be welfare reducing if the trade union has an exogenously given preference against inflation. We reframe this …

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 …

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 …

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

their location, spread, skew and tail risk on density forecast performance. Overall, we find considerable heterogeneity in … performance is somewhat better for GDP growth than for inflation, although in the former case it diminishes substantially with the … forecast horizon. In addition, relative to the proposed benchmarks, we report evidence of some improvement in the performance …

(systemic) risks. Forecasts are obtained from: (a) autoregressive and factor-augmented VARs with linear GARCH volatility (FAVARs …