Does an inflation conservative central bank à la Rogoff (1985) remain desirable in a setting with endogenous fiscal … optimal inflation rate internalizing this distortion is positive, but lack of monetary commitment robustly generates too much … inflation. A conservative monetary authority thus remains desirable. When fiscal policy is determined before monetary policy …

This paper identifies optimal policy rules in the presence of explicit targets for both the inflation rate and public … second-order approximation to the equilibrium conditions. Optimal policy features a strong anti-inflation stance and strict … fiscal discipline. Targeting a domestic inflation index - as opposed to CPI - improves welfare because it reduces the …

prices and wages. Second, the estimated model is used to analyze the welfare properties of various interest rate rules for … between the variances of price and wage inflation and the output gap. This tradeoff implies that it is desirable for the … monetary authority to respond to more than inflation, output, and past interest rates when setting the current interest rate …

This paper examines the responses of prices at different stages of production to an explicitly identified demand shock … used to identify the policy shock as the innovation to the federal funds rate in a VAR. The adjustment of prices at … different stages of production is examined by adding three different sets of prices to the basic VAR model: (a) the PPIs for …

-- Customer markets and financial frictions: implications for inflation dynamics / Simon Gilchrist, Egon Zakrajšek -- Commentary … international spillovers on inflation dynamics and independent monetary policy: the Swiss experience / Thomas J. Jordan -- Inflation … dynamics: lessons from past debates for current policy / Athanasios Orphanides -- Inflation dynamics in Latin America: a …