strengthens the gains from make-up strategies relative to inflation targeting, especially if policy space is reduced. This result … permanent scars on long-run aggregate supply. Make-up strategies not only foster the alignment of inflation with target but also … inherent make-up element is sufficiently pronounced. Inflation is less responsive to monetary policy due to the interaction …

Standard New Keynesian (NK) models feature an optimal inflation target well below two percent, limited welfare losses …-run Phillips curve between inflation and unemployment and a trade-off between price distortions and output hysteresis that change … the welfare-maximizing inflation level. For a plausible set of parameters, the optimal inflation target is in excess of …

linked to the monetary policy regime. Before and after the "Great Inflation", nominal wages moved in the same direction as … the (required) adjustment of real wages, and in the opposite direction of the price response. During the "Great Inflation … increasing inflation volatility. Using a standard DSGE model, we show that these stylized facts, in particular the estimated …

Technological Change theory. While there exists heterogeneity across countries, only very few countries show a decline in employment …

-term inflation volatility in response to exogenous shocks can be optimal; that the optimal response to adverse financial shocks is to … lower interest rates, if not at the zero bound, and to engineer a short period of inflation; that the Taylor rule may …

Can the aging process affect inflation? The prolonged decline of fertility and mortality rates induces a persistent … downward pressure on the natural interest rate. If this development is not internalized by the monetary policy rule, inflation … inflation found in the data for the euro area. In this model, continuing to follow the same rule makes inflation to be on a …

Surprisingly it did not, or at least not directly. Using micro data on consumer prices and sectoral inflation rates … has altered the behaviour of retail price setting and/or inflation dynamics. We find no evidence that anything has changed … earlier patterns. On the contrary, we do find evidence of a decline in the persistence of the inflation process in the mid …

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 …