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 …

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 …

Many inflation targeting central banks are facing calls to expand their list of policy goals. I discuss how recent …, even when, in theory, the central bank should care about multiple goals. I offer some ideas about why this might be the …

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 …

different predictions for the optimal inflation rate than their popular homogenous-firm counterparts: (1) the optimal steady …-state inflation rate generically differs from zero and (2) inflation optimally responds to productivity disturbances. We show this by … estimate the historically optimal inflation path for the U.S. economy. In the year 1977, the optimal inflation rate stood at 1 …

are ‘highly complementary and mutually consistent objectives' in a flexible inflation targeting regime which ‘dictates … inflation.' (BG, 1999, p.18). This conclusion is straightforward within the variant of the NK-DSGE framework used by BG in which … asset inflation shows up as a factor ‘augmenting' the IS curve. In the present paper, we pursue a different modelling …

inflation targeter early in this period but began to pay less attention to inflation after 2009. Loss of the strong nominal …

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 …

stability. To contain domestic inflation these central banks absorb rather then provide liquidity in their regular monetary … policy operations. Based on an augmented Barro-Gordon framework we show that inflation targeting within an environment of … implementing sterilization costs into the central bank's objective function the inflation bias increases …

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 …