responses of output, inflation, labor share and the nominal interest rate to a supply shock as identified through a structural …

The euro area as a whole has experienced a marked downward trend in inflation over the past decades and, concomitantly … these dynamics? To answer this question, we embed serially correlated changes in the inflation target into a DSGE model with … real and nominal frictions. The formal Bayesian estimation of the model suggests that gradual changes in the inflation …