of monetary policy. We use a stylized macro model of Howitt (1992) to investigate inflation dynamics under alternative … interest rate in response to inflation. In particular, if the monetary authority only responds weakly to inflation, a … cumulative process with rising inflation is likely. On the other hand, a Taylor interest rate rule that sets the interest rate …

the presence of sovereign default beliefs a monetary policy, which aims to stabilize inflation through an active interest …

experiment - where expectations are elicited from human subjects - to collect data on expectations, inflation and output dynamics … under a traditional inflation targeting (IT) framework and a PLT regime with both deflationary and cost-push shocks. We then … implications of PLT, which results in excess macroeconomic volatility. However, once augmented with an inflation guidance from the …

the Phillips curve over time. We consider different specifications and different measures for inflation. Furthermore, we … include stochastic volatility for the observation errors. Our estimation results are based on practical Bayesian state space ….S. headline inflation has remained empirically relevant over the years. …

consider the implications of a risk premium that arises from endogenous market segmentation driven by variable inflation rates …. In the absence of autocorrelation in inflation, the risk premium is constant. If inflation is correlated, however, the …