[...]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 Phillips curve model over the 1965-96period. Our results show that …

examined inthis study. Indeed, as pointed out in Bernanke and Mishkin(1997), Germany might best be thought of as a “hybrid”inflation …

current inflation and output, in the context of an optimizingmodel with nominal-price stickiness. Under a commitment regime …

output and for both domestic GDP and CPI inflation rates can replicate thecooperative allocation.[...] …

relative-price changes on inflation fluctuations. Therelative price of the flexible-price good represents a shift parameter of … the NewKeynesian Phillips curve. The optimal monetary policy is to target sticky-price inflation,rather than a broad … inflation measure... …

We describe a behavior of a central bank when its measures of current inflation and outputare subject to measurement … rateresponds to the central bank’s estimates of both current inflation and output gap, as advocatedby Taylor (1993)... …

depends on the actual inflation outcome, which maydiffer from expectations at the time the TIPS investment wasmade because …