In this paper we analyse the short- and long-run relationship between employment growth, inflation and output growth in … growth, inflation and output growth with bidirectional causality between employment growth and inflation as well as output …

conclusions that arise from the model. In the new model, the level and the variability of inflation is higher than in the Calvo … model with no selection effect. Attempting to lower inflation's variability results in a significant increase output …'s variability, without changing inflation's variability much …

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 …

indexation to past inflation to vary according to the monetary policy regime. We find that the extent of wage indexation is … significantly lower in an inflation targeting regime, in contrast to monetary targeting, exchange rate targeting and policy regimes …

variables (typically the output gap) and solving the model for inflation in terms of the observables. In practice, the equation … not be appropriate. Thirdly, there are arguments that other variables, e.g.interest rates, foreign inflation and foreign … theoretically consistent measure of the steady state and provides a natural route for foreign inflation or output gap to enter the …

constant inflation. This change has been more pronounced than elsewhere. We argue that this stems from the immigration boom in … 1995 would have led to an annual increase in inflation of 2.5 percentage points if it had not been largely offset by …