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. …

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 … of macroeconomic variables. I estimate the model by likelihood-based Bayesian methods, which allow the estimation of the …

During the decade of the 1970’s the US economy unexpectedly suffered from “stagflation” namely, high unemployment …, slowed economic growth and high rates of inflation. During the 1980’s the major macroeconomic problem became high interest … of unemployment theories in an effort to account for these anomalous observed economic events. Our paper puts forth an …