long-run inflation near zero. Despite positive long-run inflation, the Taylor principle ensures determinacy in the model …

Taylor rule that targets inflation and output growth, the optimal monetary policy is more aggressive in pursuit of its …

–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 …