contribution of fluctuations in inflation to this particular link. In the data, a temporary rise in inflation causes real commodity … prices to rise, as does a rise in trend inflation. We find that a simple dynamic equilibrium model of commodity supply and … demand gives a realistic response of real commodity prices to inflation. Based on historical simulations, shocks to inflation …

-price model with firm-level productivity growth fits this data and predicts that the optimal long-run inflation rate is positive … long-run inflation near zero. Despite positive long-run inflation, the Taylor principle ensures determinacy in the model … with firm-level productivity growth, and optimal inflation stabilization policies are standard. In a two-sector extension …

with unemployment and bargaining frictions. Shocks to long-run inflation expectations appear to account for much of the … interest rate bound, interest rates and monetary aggregates provided a misleading indicator as to the true stance of inflation …

good inflation. In addition, the Ramsey optimal monetary policy can be approximated reasonably well with a Taylor …-type interest rate rule with weights on both inflation rates and output …

Conjectures about inflation expectations are inextricably linked to our understanding of the relationship between the … therefore examines the empirical properties of inflation expectations data constructed on the basis of both qualitative and … provides some insights into the nature of the interaction between monetary policy and inflation expectations. …

implications for monetary policy as the central bank has to decide which inflation rate to target. Our results demonstrate that …

We show that low trend inflation strongly affects the dynamics of a standard Neo-Keynesian model where monetary policy … is described by a standard Taylor rule. Moreover, trend inflation enlarges the indeterminacy region in the parameter … cannot disregard average inflation in both theoretical and empirical analysis. …