–have crucial implications for the design of monetary policy and for the welfare costs of output and inflation variability. Recent … for characterizing the deterministic steady state as well as the second-order approximation of social welfare in the … implications for the welfare costs of steady-state inflation and inflation volatility, and we show that these considerations have …

This paper compares the welfare effects of anticipated and unanticipated cost-push shocks within the canonical New … anticipation of a future cost-push shock leads to a higher welfare loss than an unanticipated shock. A welfare gain from the … although unanticipated shocks lead to higher negative impact effects on welfare than anticipated shocks …

-time output gaps and use these to calibrate and estimate Taylor-type reaction functions for the Bundesbank. Most of the reaction … those originally proposed by Taylor for some of our realtime measures of the output gap. Broad monetary aggregates such as M … Bundesbank in fighting inflation, the results give support to the use of the Taylor rule for monetary policy. …

suggested in the previous literature. The welfare gains are more clearly seen in the reduced volatility of inflation than …