This paper develops a model which can explain the hump-shaped impulse response of inflation to a monetary shock. A …). Nevertheless, we can show that inflation is hump-shaped under a reasonable range of parameters. It will be also shown that, in … order for inflation to be hump-shaped, sticky wages and variable capital utilization are important as well as dynamic …

controversies surrounding the exchange rate forecastability and the absence of money in models of inflation …

of inflation in an open economy. In contrast with the closed economy literature, when policy is set non-cooperatively in … goes to zero -- is not a general result. An optimizing monetary authority faces an incentive to use the inflation tax to … gain a "beggar-thy-neighbor" advantage over the terms of trade. Strategic use of the inflation tax, however, results in a …

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 …

first modeling long memory in inflation as a result of the aggregation of individual inflation expectations and then showing … how the adoption of inflation targeting decreases the memory length in seven countries due to its moderating effect on … individual inflation expectatio …

Inflation can “grease†the wheels of the labor market by relaxing downward wage rigidity but it can also increase … uncertainty and have a negative “sand†effect. This paper studies the grease effect of inflation by looking at whether the … interaction between inflation and labor market regulations affects how employment responds to changes in output. The results show …

Extending recent theoretical contributions on sources of inflation inertia, we argue that monetary uncertainty accounts …

By placing store-level price data into bivariate Structural VAR models of inflation and relative price asymmetry, this … forecast error variance in inflation at the 12-month horizon. While the contemporaneous correlation between inflation and … relative price asymmetry is positive, idiosyncratic shocks lead to a substantial build-up in inflation only after two to five …