chooses to stabilize wage inflation at the expense of price inflation, a policy resembling the policy that is optimal in the …

In expectations-driven liquidity traps, a higher inflation target is associated with lower inflation and consumption … optimal inflation target. Using a calibrated New Keynesian model with an effective lower bound (ELB) constraint on nominal … optimal inflation target nontrivially. Our analysis provides a reason to be cautious about the argument that central banks …

policy rate will become constrained in the future lowers today's inflation by creating tail risk in future inflation and thus … reducing expected inflation. In an empirically rich model calibrated to match key features of the U.S. economy, we find that … the tail risk induced by the ELB causes inflation to undershoot the target rate of 2 percent by as much as 50 basis points …

active monetary policy by pursuing inflation and output stability over the entire post-war period. Even after accounting for … productivity and cost shocks that de-anchored inflation expectations, propagated via self-fulfilling inflation expectations and … constituted the primary sources of the run-up in inflation from the 1960s through the late 1970s …

inflation volatility and mean unemployment rate is feasible when an asymmetric policy rule is adopted …

shortfalls in inflation and output relative to exogenous trends, and the policy rate is kept at the ELB until the joint shortfall … is made up. Bernanke's second proposal adds only the cumulative inflation shortfall since the beginning of an ELB episode … directly to an otherwise standard Taylor rule. This cumulative shortfall in inflation from the 2 percent objective can be …

of the responsiveness of price inflation to that slack. Using stochastic simulations of a small-scale version of the … setting the policy rate, and substitute toward a more forceful response to inflation, is overstated. We find that a notable … response to the unemployment gap is typically beneficial, even if that gap is mismeasured. Even when the dynamics of inflation …