In models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating … stabilize price movements in the flexible price sector. Also, in the presence of financial frictions, stabilizing core inflation … frictions a welfare-maximizing central bank should adopt flexible headline inflation targeting – a target based on headline …

period. The workers' bargaining power in the hours negotiation affects both unemployment volatility and inflation persistence … cost determination. This set-up produces realistic labor market statistics together with inflation persistence …

employment and hours affecting inflation dynamics via marginal costs. We find that the response of unemployment and inflation to … persistent movements of aggregate inflation. Moreover, the impact of a monetary policy shock on unemployment and inflation …

This paper provides a new explanation of why inflation is sluggish in response to aggregate demand shocks and why … rationale for a prolonged inverse relation between inflation and unemployment. The paper suggests that the interaction of … inflation persistence and unemployment persistence may offer a possible explanation of high and prolonged European unemployment. …

" - 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 …

the inflation rate, but they very seldom cut nominal wages. This pattern suggests that workers exhibit a special … compare the inflation rate to the wage change before it becomes clear whether the change increases or decreases utility, thus … inflation rate. Although emotions may benefit individual workers, by strengthening their bargaining position and preventing wage …

Bei Vorliegen nach unten starrer Nominallöhne erschwert niedrige Inflation Reallohnanpassungen und führt so … Auswirkungen bei sehr niedriger Inflation nicht zu vernachlässigen sind. Die Ergebnisse dieser Literatur sollten daher bei der … presence of downwardly rigid nominal wages, low inflation may lead to higher equilibrium unemployment by hindering real wage …

and real wage rigidities. In our analysis, we focus on the differentials in inflation and unemployment between countries … inflation and unemployment differentials. Second, we find that asymmetries in labor market structures tend to increase the … volatility of both inflation and unemployment differentials. Finally, we show that it is important to take into account the …