state contingent inflation taxes/subsidies to smooth those rents. Hence, in the optimal Ramsey plan, inflation deviates from … zero and the optimal volatility of inflation is an increasing function of firing costs. The optimal rule should react to … employment alongside inflation. -- Optimal monetary policy ; hiring and firing costs ; labor market frictions ; policy trade-off …

In closed or open economy models with complete markets, targeting core inflation enables monetary policy to maximize … is high. We develop an open economy model with incomplete financial markets to show that headline inflation targeting … headline inflation, assigns zero weight to import prices. …

relating unemployment and vacancies to inflation, the link between these labor market indicators and inflation depends on …

In models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating … stabilize price movements in the flexible price sector. Also, in the presence of financial frictions, stabilizing core inflation … frictions a welfaremaximizing central bank should adopt flexible headline inflation targeting - a target based on headline …

This paper offers a reappraisal of the inflation-unemployment tradeoff, based on "frictional growth" describing the … able to work themselves out fully. In this context, monetary shocks have a gradual and delayed effect on inflation, and … these shocks also generate plausible impulse-responses for unemployment. Although our theory contains no money illusion, no …

dependent data and allowing for first-step estimation of the propensity score. -- Monetary policy ; propensity score …

Real wages are a key determinant of marginal costs. The latter themselves are a driving force of inflation. We ask how … wages and labor market shocks feed into the inflation process. We model search and matching frictions in the labour market … the conduct of stabilization policy. -- labor market ; wage rigidity ; bargaining ; Bayesian estimation …

inflation and unemployment. We focus on the G7 economies plus Spain, and use monthly data –high-frequency data in a macro …