. Under discretionary monetary policy the size of the inflation bias depends on the fiscal policy regime. Using the timeless … alternative fiscal policy rules, and inflation and output persistence reflects the economic data. With the deficit rules, the …

summarised as follows. (1) Historically, inflation persistence appears to have been the exception, rather than the rule, with … inflation estimated to have been highly persistent only during the period between the floating of the pound, in June 1972, and … the introduction of inflation targeting, in October 1992. Under inflation targeting, it exhibits some slight negative …

In the late 1960s and into the 1970s, the United States experienced a burst of inflation the origins of which seemed … have arrived at the erroneous conclusion that its output-inflation trade-off was better than is truly the case. This … equilibria and restore stability of inflation expectations. An implication of this is that the observed higher volatility of the …

rules. Accordingly, we augment a standard inflation targeting model in which a forward-looking version of the Taylor rule …

response of wages to high unemployment can pose adjustment problems. We address the issue using extensive simulations of an …, unique equilibrium unemployment rate but with relatively slow convergence dynamics. The interaction between unemployment … deterministic and stochastic simulations. Resulting impulse-responses are analysed, as well as the distribution of unemployment …

coefficients of the policy rules that maximize household welfare. Optimized monetary policy has a strong anti-inflation stance …