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 …

. 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 …

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 …

incorporate some “rule-of-thumb†price-setters that index to inflation over recent periods. These models are estimated for the … inertia in inflation than the baseline sticky-price model, its overall fit is worse. The results point toward substantial … gains in terms of fit for hybrid models with indexation that smoothes through quarterly volatility in inflation and clarify …

monetary policy in particular. The form in current widespread use includes both forward looking expected inflation and lagged … inflation. The presence of lagged inflation is necessary to generate predicted inflation persistence to match actual persistence … convincingly predict inflation persistence …

models consistent with macroeconomic data, especially persistence in inflation, and ii) the wealth of newly available … microeconomic data on price changing behaviour from the ECB’s Inflation Persistence Network, alongside earlier firm surveys for … “stickier†sectors. When calibrated to micro data the model predicts inflation persistence comparable to that in …

inflation? We develop and test versions of the model for which the answer to this question is yes. We then investigate whether …