experiment of the past decade, stemming from a belief of the government that higher interest rates cause higher inflation … eventually a negative coefficient on inflation in the policy rule. In such an environment, was the exchange rate still a random … walk? Was inflation anchored? Does the “standard model” suffice to explain the broad contours of macroeconomic outcomes in …

-driven theory of dynamic pricing in which the Phillips curve slope is endogenous to systematic aspects of monetary policy. In our … attention to changes in their input costs, which leads to a flatter Phillips curve and more anchored inflation expectations …

Keynesian model we show that, if households have hyperbolic discounting, small positive rates of inflation can be optimal. In … our baseline calibration, the optimal rate of inflation is 2.1% and remains positive across a wide range of calibrations. …

rational private sector expectations about housing prices and inflation, optimal monetary policy can be characterized by a … standard 'target criterion' that refers to inflation and the output gap, without making reference to housing prices. When the … increases (decreases), policy should adopt a stance that is projected to undershoot (overshoot) its normal targets for inflation …

How should central banks optimally aggregate sectoral inflation rates in the presence of imperfect labor mobility … mobility, ceteris paribus, increases the optimal weight on inflation in a sector that would otherwise receive a lower weight … computing sectoral inflation weights based solely on sector size, and unveil a significant role for the degree of sectoral labor …

aiming for two per cent inflation over the medium term”, with “symmetric commitment” to this target. “Symmetry means that the … therefore analyse this policy strategy through a model of inflation target zone, with a central value and symmetric upper and … lower bounds on inflation, within which the central bank may decide not to intervene, provided inflation is expected to …

, inflation targeting remains robustly optimal in non-U.S. economies. The implementation of this non-cooperative policy results in … inflation targeting to take advantage of its effects on global product and asset markets, generating negative spillovers on the …

We derive closed-form solutions and sufficient statistics for inflation and GDP dynamics in multi-sector New Keynesian … of inflation and GDP responses to monetary and sectoral shocks and (2) increase the pass-through of sectoral shocks to … aggregate inflation. Quantitatively, we confirm the significant role of production networks in shock propagation, emphasizing …