and in response to aggregate shocks. Key to this finding is an "envelope" property: At zero inflation, a marginal increase … in the rate of inflation has no effect on firms' profits and therefore it has no effect on the probability of price …

from an inflation targeting to a price-level targeting strategy at the onset of a recession does not yield the desired …

We use several US and euro-area surveys of professional forecasters to estimate a dynamic factor model of inflation … featuring time-varying uncertainty. We obtain survey-consistent distributions of future inflation at any horizon, both in the US … and the euro area. Equipped with this model, we propose a novel measure of the anchoring of inflation expectations that …

value of the fixed nominal mortgage payment declines over time with inflation. The change in the real value of the mortgage … payments from taking on a new mortgage is positive and an increasing function of inflation; higher inflation thus discourages … demonstrates how the share of total wealth held in housing is sensitive to the rate of inflation, even when perfectly anticipated …

We consider what, if any, relationship there is between monetary aggregates and inflation, and whether there is any … paribus unitary relationship between inflation and money growth. Simulations of a New Keynesian model suggest that we should … allowance needed for the phase shift in the relationship between monetary growth rates and inflation. While financial innovation …

Since Kydland and Prescott (1977) and Barro and Gordon (1983), most studies of the problem of the inflation bias …-quadratic approach to the problem in favor of a projection method approach. We investigate the size of the inflation bias that arises in … a microfounded nonlinear environment with Calvo price setting. The inflation bias is found to lie between 1% and 6% for …

Inflation-indexed securities would appear to be the most direct source of information about inflation expectations and … real interest rates" (Bernanke, 2004). In this paper we study the term structure of real interest rates, expected inflation … and inflation risk premia using data on prices of Treasury Inflation Protected Securities (TIPS) over the period 2000 …

This paper studies the welfare consequences of exogenous variations in trend inflation in a New Keynesian economy …. Consumption and leisure respond asymmetrically to a rise and a decline in trend inflation. As a result, an increase in the … variance of shocks to the trend inflation process decreases welfare not only by increasing the volatilities of consumption and …

examines the usefulness of these estimates for inflation forecasting. Over this period, we find that the Federal Reserve … estimation techniques. In contrast to previous work, we also find no deterioration in forecast performance when inflation …