paper explores some policy implications. First, the variability of inflation and output is lower when policy-makers respond … to model-based forecasts, rather than just current values, of inflation and output. Second, model-consistent behaviour … elsewhere in the economy stabilises inflation and output, given that the model includes a central bank reaction function which …

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 …