strategies with a strong history dependence lose their advantage over inflation targeting in mitigating a demand …-driven recessions when interest rates are constrained by the ELB. For supply shocks, inflation t argeting o utperforms h istory …-dependent r ules f or a s ufficiently high degree of BR. An exponential average inflation targeting rule, which features a …

, wages and inflation to monetary policy shocks becomes notably less pronounced. This attenuation reflects that hours worked … modification substantially lowers the effective stickiness of nominal wages, resulting in markedly different wage and inflation …

.S. data shows significantly different responses in inflation and inflation expectations consistent with theory. …Time-variation in disagreement about inflation expectations is a stylized fact in surveys, but little is known on how … inflation and inflation expectations, whereas both decline when disagreement is low. Estimating a smooth-transition model on U …

. Aggregating the model in closed form, we show that it delivers radically different predictions for the optimal inflation rate than … canonical sticky price models featuring homogenous firms: (1) the optimal steady-state inflation rate generically differs from … zero and (2) inflation optimally responds to productivity disturbances. Using micro data from the US Census Bureau to …

to recent reduced-form empirical estimates - with real risk two times more important than inflation risk. The model …

inflation. Furthermore, home bias in households' preferences allows for real exchange rate fluctuation, giving rise to …