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 …

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 …

-specific models include a Phillips curve determining inflation, an IS curve determining output, a Taylor Rule determining interest …-specific foreign output variable to capture direct inter-country linkages. In accord with the theory all variables are measured as … restrictions implied by the NK theory. The multi-country DSGE NK model is then solved to provide estimates of identified supply …

inflation. This model generates endogenous waves of optimism and pessimism (quot;Animal Spiritsquot;) that are generated by the … implications for monetary policies. One of our main results is that strict inflation targeting is suboptimal because it gives more … scope for waves of optimism and pessimism to emerge thereby destabilizing output and inflation …

restrictions which are not rejected by the data - the cost channel helps to generate an initial rise of inflation after a monetary …

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

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 …