representing the short-term real interest rate, expected inflation, inflation's central tendency, and four volatility factors that … follow GARCH processes. We derive analytical solutions for nominal bond yields, yields on inflation-indexed bonds that have … an indexation lag, and the term structure of expected inflation. Unlike prior studies, the model's parameters are …

I apply mechanism design to quantify the cost of inflation that can be attributed to monetary frictions alone. In an … moderate inflation is zero. This result is robust to different assumptions regarding the observability of money holdings, the …

counterintuitive inflation reversals where the effect of the interest rate peg can switch from highly inflationary to highly …

are often used for monetary policy. Until now, the use of trimmed-mean price statistics in forecasting inflation has often … the inflation forecasting improvements are perhaps not surprising given the current literature on core inflation …

unreasonably large inflation response. We pursue this simple test in three variants of the familiar dynamic new Keynesian (DNK …) model. All of these models fail this test. Further some variants of the model produce inflation reversals where an interest …

With the concept of trend inflation now widely understood as to be important as a measure of the public's perception of … the inflation goal of the central bank and important to the accuracy of longer-term inflation forecasts, this paper uses … Bayesian methods to assess alternative models of trend inflation. Reflecting models common in reduced-form inflation modeling …

1980's. In particular, inflation persistence has declined sharply. The paper demonstrates that this decline is consistent …) the central bank more aggressively responds to inflation …

can account for nearly two thirds of the improved inflation performance of these nations over the last two decades …

against interest rate and inflation risk, creating a trade-off between price level and debt-servicing stabilization. We derive …. Using U.S. microdata to calibrate the model, we find an optimal inflation volatility equal to almost 20 percent of the …

We study how the co-movement of inflation and economic activity affects real interest rates and the likelihood of debt … crises. First, we show that for advanced economies, periods with procyclical inflation are associated with lower real … interest rates. Procyclical inflation implies that nominal bonds pay out more in bad times, making them a good hedge against …