and makes it easier for the central bank to meet its inflation target. The threat of deflation and a liquidity trap is … inflation (with base drift in the price level) and price-level stability (without such base drift) are compared, and a suitable … loss function (corresponding to flexible inflation targeting) is discussed, including the index and level for the inflation …

inflation and aggregate output. Our main findings are threefold. First, monetary policy affects the probability of a crisis both … central bank can both reduce the probability of a crisis and increase welfare by departing from strict inflation targeting and …

A number of commentators have argued that the desirability of inflation targeting as a framework for monetary policy … risks to financial stability, but that it is possible to generalize an inflation targeting framework to take account of … form of flexible inflation targeting; in particular, the paper proposes a target criterion that would still imply an …

income growth will be divided between inflation and output growth, as well as "velocity" constraints that influence the path …-equation approach to the econometric problem of predicting how changes in nominal GNP growth will be divided between inflation and real … GNP growth. The results from the equation estimated through 1980 are used to examine the behavior of inflation during the …

these ideas by looking at the effect of central bank independence on inflation. The evidence is consistent with the notion … that central bank reforms have reduced inflation in societies with intermediate constraints and have had no or little … with the seesaw effect, in countries where central bank reforms reduce inflation, government expenditure tends to increase …

, which involves a commitment to higher future inflation. This commitment mechanism works even though, realistically, the …

average rates of money creation (or inflation) and policy responsiveness to cyclical disturbances, it is entirely feasible for …

shows not only that greater independence is associated with lower inflation, but also that the central bank's rights not to … finance the government and to set interest rates independently increase its effectiveness. The role of inflation targeting and … the distinction between price level and inflation targeting are also analyzed …

multiple solutions in rational expectations (RE) models. In three of these cases--involving inflation forecast targeting, the … zero-lower bound deflation trap, and the fiscal theory of the price level--analysis based on E-stability and adaptive …