for the unemployment-inflation tradeoff and for the conduct of monetary policy.<br><br>We proceed in two steps. We first … setting by firms. We derive the relation between inflation and unemployment and discuss how it is influenced by the presence … of labor market frictions and real wage rigidities. We show the nature of the tradeoff between inflation and unemployment …

perspective on the linkages among monetary policy, inflation, and the business cycle. It is argued that the adoption of an …

each country faces a short run tradeoff between output and inflation. The model is sufficiently tractable to solve … response to domestic inflation, under cooperation they should respond to foreign inflation as well. In either scenario …

. Among other things, we show that the optimal policy implicitly incorporates inflation targeting. We also characterize the … gains from making a credible commitment to fight inflation. In contrast to conventional wisdom, we show that gains from …