determine inflation in this regime, so I base the analysis on the fiscal theory of the price level. I find that monetary policy … can peg the nominal rate, and determine expected inflation. With sticky prices, monetary policy can also affect real … interest rates and output, though higher interest rates raise output and then inflation. The conventional sign requires a …

uncertainty and can undermine the ability of monetary policy to control inflation and influence real economic activity in the …

minimizing a loss function with three terms, involving measures of the variability of wage inflation, price inflation and the …

remarkably smooth, whereas inflation is highly volatile and serially uncorrelated. An exact numerical solution method to the …

deviations of inflation and an output gap measure from their optimal values (zero). However, those derivations rely on an … monopolistically-competitive price-setters, so that the steady state under a zero-inflation policy involves an efficient level of … policy on the average level of output. We again obtain a welfare-theoretic loss function that involves both inflation and an …