[...]This article explores the inflation puzzle andinvestigates whether compensation has acted as either atemporary restraint on inflation or as the underlying sourceof a new inflation regime.2 After reviewing the recent behavior of inflation, we specify and estimate a traditionalprice-inflation...

Many features of the German monetary targetingregime are also key elements of inflationtargeting in the other countries examined inthis study. Indeed, as pointed out in Bernanke and Mishkin(1997), Germany might best be thought of as a “hybrid”inflation targeter, in that it has more in common...