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

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 …

-makers are allowed to weight differently positive and negative deviations of inflation and output from the target values. Reduced … expansions of the same magnitude. This asymmetry is shown to induce an average inflation bias of 1.11% that appears to have … substantially contributed to the great inflation of the 1960s and 1970s. …

estate, as well as the costs of public goods to develop alternative inflation measures in Germany since the introduction of … the euro. Real economic growth as well as median wage developments are reexamined in light of the alternative inflation …

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 …

inflation bias as monetary policy tries to exploit nominal wage contracts to address labour-market distortions Although an … inflation target eliminates this inflation bias, it creates a conflict between monetary policy and discretionary fiscal policy …

the Balassa model, the paper calculates a minimum aggregate inflation rate which is compatible with the requirement that … no country face a deflation. This minimum aggeragate inflation rate is 0.94% in the euro-11 countries and 1.13% in an …

When inflation picks up, central banks are most concerned that the de-anchoring of inflation expectations and the … ignition of wage-price spirals will trigger inflation dynamic instability. However, such scenarios do not materialize in the … updated according to the actual inflation process, with indexed wages, and persistent inflation shocks. In these cases, a more …

The resurgence of inflation since the late 2021 is now accompanied by a reversal of prospects of growth, reviving fears … prominent role is played by the fall of households' purchasing power, and hence consumption, owing to the inflation shock visà … inflation surprises, independent of restrictive monetary policy, is not present in the standard New Keynesian models for …