summarised as follows. (1) Historically, inflation persistence appears to have been the exception, rather than the rule, with … inflation estimated to have been highly persistent only during the period between the floating of the pound, in June 1972, and … the introduction of inflation targeting, in October 1992. Under inflation targeting, it exhibits some slight negative …

inflation persistence; a smaller volatility of reduced-form innovations to both inflation and real GDP growth; and a … under indeterminacy is a mirror image of what it is under determinacy: both inflation persistence and the volatility of its … reduced-form innovations, for example, are increasing in the coefficient on inflation under indeterminacy, decreasing under …

, demand, monetary and entry cost shocks. The variables entering the VAR are output, inflation, the nominal interest rate …