of the two. We compare the accounting definition of deficit with the economic definition which takes inflation into …

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

We investigate both the rational explosive inflation paths studied by McCallum (2001) and the classification of fiscal … domains for which the fiscal theory solution – in which fiscal variables affect the price level – can be a stable outcome …

results in more persistent inflation as well as output responses to shocks, than without the supply-side channel. We also … discuss the different monetary and fiscal policy regimes and their implication on the stability of inflation and output. …

This paper analyses the role of inflation expectations in the euro area. On one hand, the question is how inflation … expectations affect both inflation and output, and, on the other hand, how inflation expectations reflect developments in these … variables. The analyses make use of a simple VAR model of inflation, inflation expectations and the output gap that allows for …

supply-side effects into account, we get more persistent inflation and output reactions. We also show that the dichotomy does …, under a discretionary monetary policy, the fiscal policy regime affects the size of the inflation bias. We also show that … commitment to an optimal monetary policy not only corrects the inflation bias but also increases the persistence of output …

This paper examines recent changes in the cyclicality of euro area inflation. We estimate time-varying parameters for … become steeper since 2012. Thus, the current low level of inflation and persistently negative output gap increase the risk … that euro area inflation will stay below the monetary policy target for an extended period. …

inflation and real GDP growth forecasts in the ECB Survey of Professional Forecasters. For comparison, inflation forecasts in …

This paper examines aggregated inflation expectations based on the ECB Survey of Professional Forecasters (ECB SPF). We … also be useful, especially in times of wide disagreement across forecasters and high levels of inflation uncertainty. …

This paper studies uncertainty using the ECB Survey of Professional Forecasters’ data. We consider both inflation and … are based on subjective probability distributions of survey respondents. Our analysis indicates that individual inflation … inflation uncertainty has a negative impact on economic activity by decreasing output growth and increasing inflation and …