interpreted, first and foremost, as a commitment device. In our setting, a monetary target helps anchoring inflation and inflation … well as a strong response to deviations of inflation from target and to the activity growth gap. In contrast, the response …

area (EA) and the US. The estimations show that until mid-2014 the ECB’s response to inflation was more forceful when … inflation was above 2% than below 2%. Since then, the ECB’s policy can be characterised as symmetric, and we quantify the … bound and a low neutral real rate, and find that it prescribes a stronger response to inflation and the output gap when …

inflation while declaring monetary aggregates largely irrelevant. Critics, however, have argued that these models need to be … modified to account for observed money growth and inflation trends, and that monetary trends may serve as a useful cross … persistent errors in monetary policy and sustained trends in money growth and inflation. If interest rate prescriptions derived …

equilibrium real rate using an estimated DSGE model for the euro area. We find that simple feedback rules that implement inflation … targeting result in a binding lower bound one-fourth of the time as well as inflation and output exhibiting large downward … purchases. Makeup strategies, especially average inflation targeting with a long averaging window, perform better than inflation …

estimates for inflation forecasting both in the short term (one-quarter and one-year ahead) and the medium term (two-year and …

We develop a theoretical model that features a business cycle-dependent relation between output, price inflation and … inflation expectations, augmenting the model by Svensson (1997) with a nonlinear Phillips curve that reflects the rationale … pronounced convex relationship between inflation and the output gap, meaning that the co-efficient in the Phillips curve on the …

inflation and the extent of real wage rigidity but that these effects depend on the definition of reference norms (e.g. how …

(2012) estimated on euro area data. It investigates to what extent forecasts of inflation, GDP growth and unemployment by …

-specific output gaps and inflation rates, we find that performance of the optimal policy rule can be closely approximated by a very … simple rule that targets a weighted average of aggregate wage and price inflation rates. In contrast, some commonly …-prescribed policy rules (such as strict5 price inflation targeting and Taylor's rule) perform very poorly in terms of social welfare. …