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. …

employment and hours affecting inflation dynamics via marginal costs. We find that the response of unemployment and inflation to … persistent movements of aggregate inflation. Moreover, the impact of a monetary policy shock on unemployment and inflation … ; matching models ; labor market search ; inflation persistence ; real wage rigidity …

period. The workers' bargaining power in the hours negotiation affects both unemployment volatility and inflation persistence … cost determination. This set-up produces realistic labor market statistics together with inflation persistence …

consumer price inflation rate. -- Wage stickiness ; micro-level evidence ; measurement error … correcting for measurement error, wages appear to be very sticky. In the average quarter, the probability that an individual will …

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 …

inflation targeting, exchange rate management benefits households in the tradable goods sector but in the long run these …

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 …

high during 2016-2019, keeping inflation below the Reserve Bank's target band. Optimal monetary policy in 2016-2019 would …

concludes with an empirical application to consumer price inflation in Germany, France and Italy, and re-examines the extent to … which "observed" inflation persistence at the aggregate level is due to aggregation and/or common unobserved factors. Our … persistence of the aggregate inflation. -- aggregation ; large dynamic panels ; long memory ; weak and strong cross section …