The way in which individual expectations shape aggregate macroeconomic variables is crucial for the transmission and … effectiveness of monetary policy. We study the individual expectations formation process and the interaction with monetary policy … monetary policy that sets the interest rate more than point for point in response to inflation stabilizes inflation in our …

This paper investigates the ability of the adaptive learning approach to replicate the expectations of professional … simple, yet powerful benchmark models. We find that constant gain models provide a better fit for the expectations of …

monetary conditions always signal an increase in in.ation. Recently, money growth in the euro area surged while inflation …The relationship between monetary indicators and inflation is ussually assumed to be linear, implying that looser …, suggesting that part of the money growth resulted from portfolio adjustment and was hence non-inflationary. We employ a threshold …

We assess a New Keynesian macro-economic model that is supplemented with a micro-founded role for money in determining … monetary authority takes money growth explicitly into account when setting interest rates. …

national output gaps constructed turn out to significantly explain future changes in inflation. Moreover, the analysis also … reveals that an aggregate European output gap significantly precedes aggregate European inflation, as well as inflation in the … individual EU countries. These findings imply that an aggregate European output gap may serve as an inflation indicator for the …

This paper examines whether the clarity of central bank communication about inflation has changed with the economic … environment. We use readability statistics and content analysis to study the clarity of communication on the inflation outlook by … explaining their policies when faced with higher uncertainty or a less favorable inflation outlook. The global financial crisis …