individuals use simple rules of thumb (heuristics) to forecast the future inflation and output gap. We compare this model with the … rational expectations version of the same underlying model. We find that the dynamics predicted by the heuristic model differs … from the rational expectations version in some important respects, in particular in their capacity to produce endogenous …

linked to the monetary policy regime. Before and after the "Great Inflation", nominal wages moved in the same direction as … the (required) adjustment of real wages, and in the opposite direction of the price response. During the "Great Inflation … increasing inflation volatility. Using a standard DSGE model, we show that these stylized facts, in particular the estimated …

This paper employs a stylized New Keynesian DSGE model for a monetary union to analyze whether cyclical inflation … the fraction of borrowers and to a lesser extent the loan-to-value ratio - generate inflation differentials that are … characteristics of financial markets should be seen as a possible alternative explanation for the observable inflation dispersion in …

interaction of the two elements leads to an inflation bias that is independent of the standard time-inconsistency bias. Secondly … correlated with unemployment, but not with inflation in the respective countries …

We analyze the impact of price stability-oriented monetary strategies (inflation targeting — IT — and constraining … exchange rate arrangements) on inflation persistence using a time-varying coefficients framework in a panel of 68 countries … (1993–2013). We show that explicit IT has a stronger effect on taming inflation persistence than implicit IT and is …

This paper studies the challenge that increasing the inflation target poses to equilibrium determinacy in a medium …-sized New Keynesian model without indexation fitted to the Great Moderation era. For moderate targets of the inflation rate …

found to help rationalizing the hump-shaped response of inflation, without resorting to the counterfactual assumption of …

economic performance under inflation targets, and arguments that the flexible exchange rate has undermined real economic …

individuals use simple rules of thumb (heuristics) to forecast the future inflation and output gap. We compare this model with the … rational expectations version of the same underlying model. We find that the dynamics predicted by the heuristic model differs … from the rational expectations version in some important respects, in particular in their capacity to produce endogenous …