The euro area as a whole has experienced a marked downward trend in inflation over the past decades and, concomitantly … these dynamics? To answer this question, we embed serially correlated changes in the inflation target into a DSGE model with … real and nominal frictions. The formal Bayesian estimation of the model suggests that gradual changes in the inflation …

responses of output, inflation, labor share and the nominal interest rate to a supply shock as identified through a structural …

output-inflation tradeoff equation, whereby inflation shocks raise current output. The limiting impact of mean inflation and …

-markets environment that generates persistent wealth inequalities amongst agents. In this framework, current inflation redistribute wealth … inflation expectations and thus deter the employed from saving and supplying labour. We relate the strength of these two … inflation taxes to the underlying parameters of the model and study how they compete in determining the overall sign and slope …

helpful to forecast inflation and industrial production. Keywords: International treasury yield curves, common and local …