-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 …

provide the most precise forecasts for a set of eleven core macroeconomic variables, including GDP growth and CPI inflation …

to match past inflation. However, the present paper proposes a much larger effect by using the job finding rate as the …

inflation downward. Debt deflation further depresses consumption, labor demand, and investment, altogether generating a sharp …

" - although they generate price inertia, they cannot account for the stylised fact of inflation persistence. It is thus commonly … asserted that, in the context of the new Phillips curve (NPC), inflation is a jump variable. We argue that this "persistency … equilibrium setting (in which real variables not only affect inflation, but are also influenced by it), standard wage …

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

–have crucial implications for the design of monetary policy and for the welfare costs of output and inflation variability. Recent … implications for the welfare costs of steady-state inflation and inflation volatility, and we show that these considerations have … dramatic consequences in assessing the relative price distortions associated with the Great Inflation of 1965-1979. …

that captures these two phenomena. The model predicts that the optimal rate of long-run inflation is positive and equal to … growth in firm-specific productivity. When linearized at positive optimal inflation, the model is observationally equivalent … to the basic New Keynesian model with homogenous productivity linearized at zero inflation. Optimal stabilization …

inflation volatility. The analysis for 75 countries which have adopted MPCs provides some support for the above suggestion …: countries with less than five MPC members tend to have larger deviations from trend inflation than MPCs with five members …