changes and selected shocks are illustrated in the paper. …

information about inflation expectations – that survey measures of expectations are inconsistent with rational expectations, but … less so for financial markets than households; that actual and expected inflation interact with each other; and that the … foreign exchange market anticipates tighter monetary policy when inflation is higher than expected. The second half of the …

Ball and Sheridan (forthcoming) show that OECD countries with a history of high inflation before the 1990s have … subsequently experienced a larger degree of disinflation than countries with a history of low inflation. They label this process … ‘regression to the mean’, and argue that it explains why those OECD countries which adopted inflation targeting experienced larger …

. These include the distinction between the short and long-run trade-offs between inflation and unemployment, and the changing … level of the non-accelerating inflation rate of unemployment (NAIRU), particularly in the 1970s. We estimate Phillips curves … discussion of the changing role of the Phillips curve in the intellectual framework used to analyse inflation within the Reserve …

Long-term nominal interest rates in a number of inflation-targeting small open economies have tended to be highly …

shocks are ignored in the setting of policy if they are expected to have only a temporary impact on inflation. …Several recent papers have explored the possibility that inflation-targeting central banks in small open economies pay … transient effects on inflation could be counterproductive. Accordingly, we investigate whether the Reserve Bank of Australia …