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 … Survey data. The results suggest that expectations drive inflation with a lag of about 6 months, which casts further doubt on …

Over the last two centuries, the cross-spectral coherence between either narrow or broad money growth and inflation at … other countries, thus implying that the fraction of inflation’s long-run variation explained by long-run money growth has …, being for long periods of time smaller than one. The unitary gain associated with the quantity theory of money appeared in …

Under inflation targeting inflation exhibits negative serial correlation in the United Kingdom, and little or no …, inflation appears to be (nearly) purely forward-looking, so that no mechanism introducing backward-looking components is … necessary to fit the data. These results question the notion that the intrinsic inflation persistence found in post-WWII U …

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 …

This paper assumes that a central bank commits itself to maintaining an inflation target and then asks what measure of … the inflation rate the central bank should use if it wants to maximize economic stability. The paper first formalizes this …

announcing a quantified inflation objective, other forms of communication, or by publishing central banks’ inflation and output … (economic) transparency, and given our findings that disagreement among inflation expectations in the general public is not …

This paper first shows that the forecast error incurred when assuming that future inflation will be equal to the … inflation target announced by the central bank is typically at least as small and often smaller than forecast errors of model …-based and published inflation forecasts. It then shows that there are substantial benefits in having rule-of-thumb agents who …