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

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 …

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 …

emphasize the importance of the Basel III accords in alleviating the output-inflation trade-off faced by central banks, and cast …

2% by the start of 2011, with an impact on inflation of 1 percentage point around a year later. These estimates are …

This paper uses a ‘trendy' approach to understand UK inflation dynamics. It focuses on the time series to isolate a low …-frequency and slow-moving component of inflation (the trend) from deviations around this trend. We find that this slow-moving trend … explains a substantial share of UK inflation dynamics. International prices are significantly correlated with the short …