measures of arginal cost as the relevant determinant of inflation, as the theory suggests, instead of an ad-hoc output gap …We develop and estimate a structural model of inflation that allows for a fraction of firms that use a backward looking …. Real marginal costs are a significant and quantitatively important determinant of inflation. Backward looking price setting …

-priori notions of positive association between inflation rates and profit rates, our theory proposes a critical test of a negative … mechanism follows from our theory that when the profit rate is above a normal-target rate, competitive forces operate to lower … as a strategy to improve profitability. The notion of "correlated strategy" is adopted from game theory. The mechanism …

This paper studies the relationship between inflation, output, money and interest rates in the euro area, using data … power for future inflation. The real money gap contains more information about future inflation than the output gap and the … Eurosystem's money-growth indicator is an inferior indicator of future inflation …

U.S. inflation using a framework that ignores monetary frictions? The fiscal theory of the price level allows us to … history of U.S. inflation with a fiscal-theory, frictionless view. I show how the fiscal theory can accommodate the stylized …Financial innovation challenges the foundations of monetary theory, and standard monetary theory has not been very …

state) inflation; cyclical interaction of inflation with real variables; and positive analysis of monetary policy behavior …. With regard to ongoing inflation, the paper demonstrates that the principal conclusions of theoretical analysis are not …. Whether one assumes finite-lived or infinite-lived agents, such models suggest that steady-state inflation rates will conform …

, consistent with the evidence, increases with inflation. Because we assume that firms sell multiple products and choose how many … inflation accelerator--a feedback loop between inflation and the fraction of price changes--which significantly increases the … slope of the Phillips curve during periods of high inflation. Applied to the U.S. time series, our model predicts that the …

This paper isolates the role of conflict or disagreement on inflation in two ways. In the first part of the paper, we … present a stylized model, kept purposefully away from traditional macro models. Inflation arises despite the complete absence … of money, credit, interest rates, production, and employment. Inflation is due to conflict; it cannot be explained by …