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 …

In a standard New Keynesian model, a myopic central bank concerned with stabilizing inflation and changes in the output … stabilizing output gap changes, the central bank imparts inertia into output and inflation that is absent under pure discretion … social outcomes if it focuses on inflation and changes in the output gap than are achieved under inflation targeting. …

either the inflation or the output gap varies in terms of magnitude and/or statistical significance across the high and low … inflation regimes in all countries. In particular, the exchange rate has an impact in the former but not in the latter regime …

Moments (TVP-GMM) framework. Using monthly data until December 2022 for five inflation targeting countries (the UK, Canada …, Switzerland), we find that monetary policy has become more averse to inflation and more responsive to the output gap in both sets … of countries over time. In particular, there has been a clear shift in inflation targeting countries towards a more …

-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. …

official policy rates and those implied by three types of Taylor rules in both inflation targeting countries (the UK, Canada …, Australia and New Zealand) and others that have only targeted inflation at times (the US, Japan, the Euro Area and Switzerland …

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 …