Under a flexible inflation targeting regime, should policymakers avoid any reaction to movements in the foreign … exchange market? Using data for six advanced open economies explicitly targeting inflation, the paper examines empirically … monetary policy responses in inflation-targeting, open economies have changed significantly, as the institutional framework for …

to explain most features of the "Great Inflation." …

-side flexibility are indeed the main channel through which monetary policy lowers the volatility of inflation and, even more …

This paper proposes a new method of estimating the Taylor rule with a time-varying implicit inflation target and a time …-varying natural rate of interest. The inflation target and the natural rate are modeled as random walks and are estimated using …

We analyse optimal monetary and fiscal policy in a New-Keynesian model with public debt and inflation persistence … striking result is not true with high degrees of inflation persistence. Secondly, we show that optimal fiscal policy is more … active under discretion than commitment at all degrees of inflation persistence and all levels of debt. …

transformed money demand, in addition to the observed output gap and inflation, into a simple but optimal interest rate rule …

this paper is that strict headline inflation targeting could be outperformed by sectoral inflation targeting, output gap … inflation stabilization, the two most common policies in modern central banks' practices. For practical monetary policy design … which core inflation targeting turns out to be the optimal choice in the context of implementable Taylor rules. …