This paper addresses the estimation of Phillips curve equations for the euro area while employing less stringent … assumptions on the functional correspondence between price inflation, inflation expectations and marginal costs. Expectations are … not assumed to be an unbiased predictor of actual inflation and instead derived from the European Commission’s Consumer …

underlying estimation uncertainty. A Monte Carlo experiment gives evidence on the small-sample performance of these asymptotic … empirical work is illustrated by two applications to euro area data on inflation, output and interest rates. JEL Classification …

equation. Money plays a quantitatively more important role with regard to output estimation if we allow for a contribution of …

alternative monetary policy strategies. We focus on the relationship between output and inflation and investigate the fit of the … reject the nominal contracting model in favor of the relative contracting model which induces more inflation persistence, we … in countries which transitioned out of a high inflation regime such as France and Italy. JEL Classification: E31, E52, E …

private learning and misperceptions of natural rates call for greater policy inertia, a more aggressive response to inflation …

natural rate and large real-time errors in estimates of the natural rate uprooted heretofore quiescent inflation expectations … and destabilized the economy. Had monetary policy reacted less aggressively to perceived unemployment gaps, inflation … activist policies would have been more effective at stabilizing both inflation and unemployment. We argue that policymakers …

The information content of broad money M3 for future GDP inflation in the euro area is investigated from a number of … real M3 holdings, real GDP, inflation and short- and long-term interest rates. Secondly, this empirical framework is … predictive power for future inflation. And thirdly, the P-star type of model developed is compared with an existing rival model …

indicators in predicting euro area HICP inflation out-of-sample over the period first quarter 1999 till third quarter 2006 …