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 …

Most of the papers in the sticky-price literature are based on a log-linearization around the zero inflation steady … state, a simplifying but counterfactual assumption. This paper shows that when trend inflation is considered, both the long … results obtained by models log-linearized around a zero inflation steady state are quite misleading. Furthermore, the same is …

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 was a period of very low inflation. The rate of growth in the aggregate price level was occasionally very close to … inflation. The declining prices cannot, however, be explained by lack of demand or any generalized deflationary tendencies … develops a new method for looking at the composition of inflation and illustrating how relative price dynamics interact with …