This paper analyses the role of inflation expectations in the euro area. On one hand, the question is how inflation … expectations affect both inflation and output, and, on the other hand, how inflation expectations reflect developments in these … variables. The analyses make use of a simple VAR model of inflation, inflation expectations and the output gap that allows for …

This paper shows the way how persistent world inflation shocks hitting a small open economy can re-weight the … inflation. We derive a state-dependent Phillips curve based on translog preferences that make the elasticity of substitution of … disinflation on domestic inflation, as experienced in small open economies such as New Zealand, Chile and Peru. …

stance, before and after its adoption of the inflation targeting framework, as revealed by its interest rate setting behavior … inflation by and large through its key policy rate, though it appears to be accommodative with respect to the output gap. In …

in principle less restrictive approach is applied to operationalising expectations. Direct measures of inflation … expectations, ie OECD forecasts, are used as empirical proxies of economic agents’ inflation expectations. The main interest is in … the euro area as a whole, although potential heterogeneity of inflation dynamics is also examined across eleven EMU …

In this paper we establish a link between the volatility of oil price shocks and a positive expected value of inflation … in equilibrium (inflation premium). In doing so, we implement the perturbation method to solve up to second order a … relaxes certainty equivalence providing a link between the volatility of shocks and inflation premium. First, we obtain …

and inflation indexation, that are typically needed in monetary models with rational expectations to match the persistence …

, slowed economic growth and high rates of inflation. During the 1980’s the major macroeconomic problem became high interest …

equities fail the test as inflation hedges, as had been quite widely believed, but that they take so long to pass. …