confidence in the model specification, a robust policymaker mainly fears that the exchange rate and domestic inflation equations …

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

We study the implications of uncertainty for inflation targeting. We apply multiplicative uncertainty to a standard … new algorithm that we put forward, in which the inflation target is state contingent. The Central Bank sets therefore (as … an auxiliary step), a variable inflation target that depends on both the degree of uncertainty as well as the shocks that …

In this paper we establish a link between the volatility of oil price shocks and a positive expected value of inflation … in equilibrium (inflation premium). In doing so, we implement the perturbation method to solve up to second order a … relaxes certainty equivalence providing a link between the volatility of shocks and inflation premium. First, we obtain …

unconditional volatilities accompanied by a reduction in the unconditional mean in inflation and interest rates vis-a-vis an … interest rate and inflation along with an increase in the unconditional mean of the money demand as a consequence of the …

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 …