try to prevent a cut in nominal wages. If inflation is so low that some nominal wages have to be cut, the strategic … advantage of the workers' induces higher unemployment in equilibrium. The upshot is a long run tradeoff between inflation and … unemployment for low levels of inflation. The prediction that low inflation involves higher unemployment in Europe but not in the …

This paper examines the behavior of quarterly inflation in India since 1994, both headline inflation and core inflation … headline inflation feed into expected inflation and future core inflation. Several aspects of India's inflation process are … as measured by the weighted median of price changes across industries. We explain core inflation with a Phillips curve in …

inflation (with base drift in the price level) and price-level stability (without such base drift) are compared, and a suitable … loss function (corresponding to flexible inflation targeting) is discussed, including the index and level for the inflation … price stability. The benefits of credibility (private inflation expectations coinciding with the inflation target) are …

followed the German hyper-inflation. Significant real dislocations arose after the monetary reform; and these can be attributed … to a government policy which subsidized heavy industry through the inflation tax proceeds. The "credibility problem …

probability of being a common currency country and outcome' equations for growth, volatility and inflation. We find that both type … of common currency countries have lower inflation than countries with a domestic currency. Dollarized countries have …

In a previous attempt to articulate the costs of inflation (Leigh-Pemberton (1992)), the Bank of England outlined the … following costs of a fully-anticipated inflation: - the cost of economising on real money balances -- so-called shoe … these costs when moving from 2% inflation to price stability in the U.S. Feldstein concluded that the permanent welfare …

Going from low inflation to price stability involves a short term loss (associated with the" higher unemployment rate … required to reduce the inflation) and results in a series of welfare gains" in all future years. The primary source of these … gains is the reduction in the distortions that result" from the interaction of tax rules and inflation. The paper quantifies …

We explore a hypothesis about the take-off in inflation that occurred in the early 1970s. According to the expectations … trap hypothesis, the Fed was pushed into producing the high inflation out of a fear of violating the public's inflation … expectations. We compare this hypothesis with the Phillips curve hypothesis, according to which the Fed produced the high inflation …

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