price model a 'weak' central bank response to inflation generates sunspot fluctuations, the consequences of pooling … of inflation persistence had not been investigated. Using Monte Carlo simulations from a purely forward-looking model …, this paper shows that indeterminacy can introduce a sizable persistence in the process of inflation. On the reduced form …

This paper aims to contribute to our understanding of inflation dynamics in the United Kingdom by estimating two …

Market-based measures of inflation expectations can be derived either from the difference between yields on nominal and … inflation-linked government bonds or from inflation swap rates. These measures are important indicators of the outlook for … inflation and are monitored regularly by the United Kingdom's Monetary Policy Committee (MPC), alongside other measures of …

We develop a model that can explain the evolution of trend inflation in the United States in the three decades before … inflation arises endogenously and has these determinants: the strength with which the central bank responds to inflation, the … degree of uncertainty about monetary policy perceived by the private sector, and, if it exists, the inflation target. Given …

the UK economy. We find that a 1 percentage point increase in the policy rate reduces output by up to 0.6% and inflation …

, we find that monetary policy has persistent effects on real interest rates and breakeven inflation. Second, employing our …

We establish a set of novel empirical facts concerning cross-section distributions of inflation expectations reported … of inflation that exploits the heterogeneity present in individual-level data. By using survey information more … effectively, our approach reveals an enhanced role for expectations in inflation dynamics that is robust to lagged inflation …

downward pressure on wage inflation has regained significant traction recently. This paper investigates whether the conclusion … that long-term unemployment is only weakly related to inflation depends on the assumption of linearity in the Phillips … significant negative influence on wage inflation, whereas in a linear Phillips curve model it is only the short-term unemployment …

Why is inflation so much lower and at the same time more stable in developed economies in the 1990s, compared with the … inflation equilibrium. Our argument builds on the story proposed by Tom Sargent in "The Conquest of American Inflation," where … the fall in inflation in the 1980s was attributed to the changing beliefs informing monetary policy. To explain the escape …

, investment, and output, and a muted response of inflation and measured total factor productivity (TFP). This suggests that news … play an important role in explaining business cycle fluctuations, but also that attention should not be limited to TFP news …